Good morning! Not much changed in Monday's session as compared to the recent trading. The indices gapped slightly higher, but fell into congestion early on as they awaited the 10:00 ET ISM data. The Institute for Supply Management index for March fell to 50.9% off 52.3% in February. This was a lot stronger than expected and the reaction was strongly negative. The gap closed immediately and then the markets continued to fall into support on the 15 minute time frame from the previous couple of days of trading. Volume spiked as the market became exhausted and slowly the pace turned over.
 
As the day progressed, the market pace continued to turn around. While the bears had been leading the market in recent days, the indices popped off the lows around 10:15 ET. This bounce was followed by a gradual correction along resistance into the 11:00 ET reversal period when the market formed a 5 minute Phoenix. The follow through on this buy pattern was the most pronounced in the S&P 500 and Dow Jones Ind. Ave.

By forming a much larger than average move out of the Phoenix, it made it difficult for the buyers to continue to reign over noon and instead the market turned over, selling off throughout the first half of the afternoon. The first drop into noon was the strongest, and while the market established three distinct waves of selling, the overall trend was choppy and it took about three hours to slowly selloff. The Nasdaq made it back into the morning lows, which served as support coming out of 14:00 ET, but the S&P 500 and Dow just found support from the earlier morning congestion when the markets turned higher. This gradual overall drop made it easy for the market to turn over again into the last two hours of the day and the bulls soon took over. An initial wave of buying was followed by a second move that took the Nasdaq into its 15 minute 200 sma on the all sessions time frame and brought the Dow into its opening highs price resistance. This held for the last 45 minutes or so of trading.







The Dow Jones Industrial Average closed higher by 27.95 points (+0.2%). The S&P 500 rose 3.69 points on Monday (+0.3%). The Nasdaq Composite ($COMPX) had the most difficult time. It only rose 0.62 point (0.0%). The strong momentum change on the 15 minute time frame has me less bearish heading into Tuesday than I was on Monday, but I'm not strongly positioned either way in swingtrades at this time. I plan to focus primarily on the intraday activity this week ahead of the extended three-day weekend. Thursday should be a particularly slow day of trading given that most of the markets are closed on Friday.

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.