Good morning! The market had a much stronger day on Wednesday than I was expecting heading into it. With faster downside pace and the slightly higher highs trapping traders over the last week or so of trading, I was looking for that corrective action to continue. Early on in the morning this bias held well. After a slight gap up, selling hit. It look the market lower into 10:00-10:15 ET. The NASDAQ came to a halt though when it hit its prior lows and the 15 minute 200 sma support at 10:00 ET while the SP500 and Dow pulled into comparable support at the 10:15 ET reversal period.

The correction off this price and moving average support just 45 minutes into the day got off to a low start, but spiked into 10:30 ET, with the NASDAQ leading the way. By hitting support first, the NASDAQ was able to make it back to the prior 15 minute highs while the SP500 only made it back to its 5 minute 20 sma resistance. These levels held into the 10:45 ET reversal period and led to a pullback into noon. The pace was weaker than the move off lows, but still on the stronger than average side. This made for a larger trading range going into the early afternoon.

While the market was starting to turn over intraday and the upside pace was now outperforming the downside pace, I was more leery on taking a NASDAQ triangle breakout because the upward slant on the triangle was initially very steep. It took a slight break in the uptrend channel on a very small 5 minute Avalanche into the 13:00 ET reversal period to flush this out and then another slower base back at the upper end of the trend channel going into the 14:00 ET reversal period to create the strong upside move into the close. The SP500 and Dow Jones Ind. Ave. both had looked higher already with 15 minute Cup with Handle formations as they based along the 15 minute 20 sma. The 14:00 ET reversal period helped them breakout as well.

The market slowed down into 15:00 ET after putting in an equal move on the 15 minute charts as compared to the rally off morning lows. The equal move hit a bit before this reversal period, but the NASDAQ just rounded off instead of pulling back as it corrected. The SP500 and Dow both tried a bit harder to move up until the close, but they are still holding the range on the 60 minute charts even though the NASDAQ mid-day breakout freed it from that resistance.

Updates: VAR from last Wed. hit new highs again on Wednesday at $40.09 before closing on the day with a base at highs ahead of earnings. The weekly chart is still looking very nice. BCO is still of interest as a buy on a daily breakout.

Economic Reports and Events
July 28: Initial Claims 07/23 (8:30 am), Help-Wanted Index for Jun (10:00 am)
July 29: Chain Deflator-Adv. For Q2 (8:30 am), Employment Cost Index for Q2 (8:30 am), GDP-Adv. For Q2 (8:30 am), Mich Sentiment-Rev. for July (9:45 am), Chicago PMI for July (10:00 am)
Aug 01: Construction Spending for Jun (10:00 am), ISM Index For July (10:00 am)
Aug 02: Personal Income for Jun (8:30 am), Personal Spending for Jun (8:30 am), Factory Orders for Jun (10:00 am), Auto Sales for July (12:00 am), Truck Sales for July (12:00 am)

Earnings Announcements of Interest
Only stocks with an average daily volume of 500K+ are listed. List may not be complete so be sure to always check your stocks' earnings dates before holding a position overnight. (A) = Earnings after the close, (B) = Earnings before the open, (?) = Earnings time not specified at the time of this writing
July 29: AEP (B), APC (B), ADM (B), BHI (B), CVX (B), CZN (B), CEG (?), LEA (B), MENT (?), MCO (B), WBR (B)
Aug 01: BRKS (A), CECO (?), ETR (B), EOP (A), GPRO (A), GGP (?), HUM (05:00 am ET), LNC (A), MVSN (A), MMC (?), MXIM (A), OIS (A), PEG (B), SBAC (A), PFG (A), TWTC (A), UCL (?)
Aug 02: CTAC (A), AOC (A), AUO (8:00 pm ET), BMC (A), BORL (?), CDIS (A), CEPH (A), CHTR (B), COH (B), CMCSA (?), CVH (B), CCI (A), EMR (?), INCY (?), IACI (B), MAS (?), MBI (?), NTES (9:00 pm ET), PXD (B), PPL (B), PRTL (A), PDLI (A), KWK (A), Q (B), RNWK (?), RDC (B), SRE (?), SIRI /B(, SBL (?), THC (?), RIG (B), TXU (?), TYC (B), UNTD (A), UNM (A), UTSI (A), VPHM (A), VSH (?)

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.