Good day! I hope you had a wonderful trading week last week! Things have slowed down a great deal in the last couple of weeks. While the Nasdaq Composite has the trading range we were looking for, both the S&P 500 and the Dow Jones Industrial Average have been creeping slowly higher. The S&Ps are still hold the previous highs on the daily time frame, but the Dow has been pushing forward, continuing to make new records highs and new closing highs. Friday was a bit more active than earlier in the week with more stocks showing momentum even though the volume was lighter. The Dow gained 79.81 points on the day, the S&P 500 rose 10.00 points, and the Nasdaq climbed 19.07 points. Some of the top gainers on the session included IBM, RIG, GS, PPG, BTU, MER, AQNT, FMVN, INTU, JRCC, CTSH, PCLN, OMTR, and GRMN.

The indices began the day on Friday with a slight upside gap that took the market into the area from Thursday's highs. This price resistance stalled the move and the market pulled back slightly, but the momentum on the pullback was weak overall and occurred on declining volume. This displayed a lack of motivated sellers and starting at about 10:00 ET the indices began to recover. All three of the major indices established new intraday highs by 10:30 ET, but also began to weaken again shortly upon doing so.

Even though the correction began somewhat quickly off morning highs, the volume was again light and the momentum slows a great deal throughout the rest of the morning, leading to a trend break and buy setup out of the 12:00 ET reversal period. Before long the S&P 500 and Nasdaq Composite were once again hitting new intraday highs, although the Dow, which was more extended than the rest of the market, hit its morning highs and held that price resistance. This resistance level, along with the upper trend channel line in the Nasdaq, led to another correction into the early afternoon.

On this third correction off highs on Friday the market pulled back a bit more rapidly with two short waves of selling into about 13:30 ET. When the market came into the first support they bounced a bit better than they did at 11:00 Et, but it was short-lived and the highs held. A second tiny upside move into 14:30 ET slowed the upside pace so that overall the market hugged the 5 minute 20 simple moving average . This created an Avalanche formation in the Nasdaq and some double tops in the S&P 500 and Dow Jones Ind. Ave. The market broke quickly through the support and back into the support from noon. Despite this change of pace, the market again rounded off at lows around 15:00 ET and managed to pull back high in the final half hour of trading to close at the level of the day's highs. As we head into the new week, this bullish bias remains in place.







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.