Good day! Trading was calm on Friday in the overall market, however many stocks continued to outperform, as well as underperform, the overall market. This continued the plethora of intraday setups available for traders despite the slowing overall market as the Dow hits the 13,000 zone. As a whole, the market remained relatively unchanged on Friday. The Dow Jones Ind. Ave. ($DJI) gained 15.44 points, closing at 13,120.94. The S&P 500 ($SPX) lost a mere fraction of a point, ending the day at 1494.07. The Nasdaq Composite ($COMPX) gained 2.75 points, closing at 2557.21. Among the top gainers were CMI, GT, WMI, NOV, MEE, BIDU, MCHP, and NTGR. The main losers included WFR, OCR, CAL, LCC, OMX, UAUA, KYPH, and GILD.

Friday began with a small gap down into the open. Prior to the open, the GDP report came out, showing the weakest expansion in the U.S. economy in four years at a 1.3% real annualized growth in the first quarter of this year. The weak housing market played a particularly influential role. Nevertheless, the day began at a great deal of support. All three of the major indices hit lows on the 15 minute charts from the previous session and even though the market chopped around a lot following the open, the 10:00 ET Michigan sentiment report provided a minor boost. The University of Michigan's final consumer-confidence reading was 87.1 for April, falling slightly from March's level, but beating expectations of 85.0. It was enough to create a closure of the morning gap. The Nasdaq had experienced the smallest morning gap and it was able to rally into the triangle on the 5 minute charts from Thursday, while the weakest index, the S&P 500, just barely closed its gap and hit resistance at the 5 minute 20 sma. These resistance levels held and the market turned back around for the next 30 minutes of the day with strong selling to mimic the upside pace.

The selling reversed a second time at the onset of the 10:45 ET reversal period. The momentum was again average to above average and hence continued to push the market sideways in a trading range. The S&P 500 and particularly the Dow took back the greatest percentage of the losses from the prior decline and thus displayed the greatest strength heading into lunch. Even though the Nasdaq struggled with busting the previous intraday highs, the S&P 500 and Dow pushed through them into noon. From that point onward the markets displayed a decent degree of divergence into the late afternoon. The S&Ps and Dow continued to climb, holding the 5 minute 20 sma support throughout, while the Nasdaq remained stuck in the morning's range.

The upside finally stalled in the Dow and S&Ps heading into 15:00 ET. They began to hug the 5 minute 20 sma and then broke lower with an increase in downside momentum. The breakdown took back all of the gains from the earlier triangle breakout at noon and returned the Nasdaq into the lower end of its own range before the market bounced back into the final 15 minutes of trading. It was not enough to lead to a return to the highs, but all three indices came close.







As earnings season continues, I expect to continue to see many of the same momentum plays that we have thus far. This season has been a great deal more active than the last one and only about 61% of companies have reported to date. In this past week, most of my focus has been on stocks as opposed to futures as a result of the momentum we have been seeing in them as compared to the overall indices which have been moving higher, but have been primarily dealing with more of a choppy trend. Not much is likely to change in that regard during this upcoming week. I expect that a larger correction on the daily charts is likely to hold off until earnings season starts to wind down a bit more.

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.