Good day! Tuesday was a rather slow day for the market. The indices opened nearly unchanged and chopped higher into the 10:15 ET correction period. At that point the indices began to turn over. The selling was slow at first, but the 5 minute 20 simple moving average served as support and the indices hugged the support zone before giving way to a second wave of selling into the Nasdaq's 5 minute 200 sma. An equal move as compared to the previous descent also corresponded to this support level, as did the 11:00-11:15 correction periods. Another correction followed, lasting as long as the first and then broke lower with a third breakdown to complete the downtrend cycle into noon.

After breaking the downtrend channel, correcting relatively quickly off the lows at 12:00 ET, the market pulled back again into 13:00 ET. The Nasdaq made a very slightly lower low at that time, leading to a 2B buy trigger off the double bottom. The indices again rose, moving back into the congestion that had formed after the first drop from lows into 11:00 ET. The market stalled there and corrected, but the pullback off the highs was very brief and stalled as soon as the Nasdaq again tested the 5 minute 200 sma at the 14:00 correction period. It continued to hold a range into 15:00 ET while the indices became more and more choppy with a lot of overlap and very little change in price.

The indices diverged quite a bit in the final hour of trading. The Nasdaq began a stronger upside move, while the S&P 500 crept higher and the Dow Jones Ind. Ave. barely moved at all in either direction. The Nasdaq rallied throughout the remainder of the daily, finally hitting resistance at the same time as the market closed when it came into the previous highs on the 15 minute time frame. The S&P 500 ($SPX) closed higher by 3.78 points, while the Dow ($DJI) gained 4.71 points and the Nasdaq Composite ($COMPX) rose 8.43 points. The closing resistance held and the market turned over again after hours. Both the S&P 500 and Dow Jones futures made it back to the zone of the intraday lows by midnight, while the Nasdaq retraced approximately half of the day's gains.







On Wednesday the FOMC will release the minutes from its last session. This likely contributed to the slowdown Tuesday afternoon and should continue to keep trading at lighter levels throughout much of the day on Wednesday until the 2:00 release. Over the past year or two this release has been causing quite a stir, leading to some strong intraday moves, so I'll refrain from holding any daytrades into that time period.

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.