Good morning! After chopping around all month, the market finally got a boost out of its smaller daily trading range following Wednesday's Fed announcement. Hope's were raised for rate cuts ahead and the market ran with those expectations and held onto them throughout Thursday's session as well. After closing near highs the day before, the indices did very little yesterday. Volume was not light, but the indices were relatively unchanged by day's end. The Dow Jones Industrial Average ($DJI) gained 13.62 points, while the S&P 500 ($SPX) lost 0.50 point. The Nasdaq had the most relative weakness, primarily in the morning, loosing 4.18 points to close at 2,451.

After hitting a slightly higher high into the close on Wednesday, the Nasdaq trapped latecomers by falling right away out of the open on Thursday. Although the market overall held up well, there were a larger number of trap patterns on the day. These were stocks that had closed strongly the previously afternoon and then gapped down significantly by the time the market opened the next day. MLHR was a great example, providing shorting ops throughout the day before it hit its 200 day simple moving average support, which held into the close. PALM and INTU were also traps, but hit daily support early on and fell range-bound throughout the session.

Initial support hit in the market around 10:00 ET. This led to a rapid, but short-lived bounce before a second slightly lower low was made. The market chopped around into 11:00 at lows from the previous day. After rounding off at lows, it was not long before the market was moving higher again. It formed a continuation pattern into noon and the Dow and S&Ps were soon back at highs, while the Nasdaq trailed. The slower pace in the Nasdaq and rounded highs in the other two indices broke with a return to the lower half of the range into 13:00 ET. The range up to that point in the day held for the remainder of the session and I found that after a nice morning of trading, it was a bit more difficult to find strong movers in the latter half of the day.







The market is coming into a lot of resistance on the daily time frames, which held in buyers on Thursday because of the opening gap from huge selloff at the end of last month. Nevertheless, I wouldn't go against it just on that point alone. The next resistance is just shy of last month's highs and it wouldn't take more than a day or so of strong momentum to get there should this range break higher. The momentum within the base itself is neither overly bearish nor bullish at the moment, so I'll just be taking things slow on Friday and watch for a slowdown in one direction to indicate a breakout having higher potential to move in the opposite direction.

Toni Hansen is President and Co-founder of the Bastiat Group, Inc., and runs the popular Trading From Main Street. She can be reached at Toni@tradingfrommainstreet.com.