Good day! The market had a fairly strong session on Thursday despite a nice decline the previous day and even into Thursday morning. The range was wider with a better intraday trend move than I had anticipated heading into the session, but it did hold with the expectation of greater overlap from one day to the next as the correction continues from the highs made earlier in the week. The day began with a small downside gap, followed by stronger selling to complete the move from Wednesday afternoon, which had been a continuation of the two wave decline on Wednesday morning.

Support hit in the indices at the 9:45 ET reversal period. This corresponded to the daily moving averages which have been converging over the past month and a half. After turning over, the market found initial resistance as the 5 minute 20 sma hit in the S&Ps and the gap closed in the Nasdaq Composite and Dow Jones Industrial Average. After only a brief correction, the resistance broke and a second wave of buying came in. This time the correction came after the Dow gap closed and the 15 minute 20 sma hit in the Dow and S&P 500. It mirrored the previous one in terms of how long it took to develop and hence led to a third move in the trend and the odds for a larger correction to follow.

The larger market correction hit at the 11:15 ET correction period and led to a break in the uptrend channel and a pullback into noon. Volume was light on this selloff, however, suggesting that the selling pressure was not that strong despite the price correction. Once the 5 minute 20 sma hit, along with the 12:00 reversal period, the buyers returned and the Nasdaq made it back to the congestion along the highs a few days back while the Dow found resistance at the previous afternoon's highs. The Nasdaq also hit the previous afternoon highs at the same time, but had the 5 minute 200 sma in the way of further advancement as well and the market again corrected into 13:00 ET and back to the 5 minute 20 sma support level.

A third wave of upside on the 5 minute charts propelled the indices into new intraday highs around 13:30 ET. The momentum began to slow, however, and the change was particularly noticeable on the Nasdaq, which had only barely higher highs on the 5 and 15 minute charts, while the lows of the trend advanced more quickly. This showed a greater relative weakness in that index since the highs were steadier and more uniform in the S&P 500. The result was a sharper pullback on the Nasdaq and it was unable to again make any more intraday highs. On the other hand, the S&P 500 and Dow Jones both continued to climb, albeit at a significantly slower pace.







By the end of the session the Dow had added 68.34 points, the S&P rose 8.93 points, and the Nasdaq added 21.01 points. With the support levels on the daily still holding, it is looking like the market is going to take a stab again at the price resistance from back in February over the next couple of days. That level, however, will not be as easy to break.

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.