Good day! The market pushed higher on Monday morning after ending the past week with an upside bias. The congestion that had been in place on the larger intraday time frames broke higher early on in the day. There was a bit of choppiness out of the open, but the bulls pushed through it, increasing in pace out of 10:30 ET to break through the previous day's highs. The Nasdaq, which had been lagging in recent weeks, had the least resistance and rose sharply out of the 10:45 ET correction period. This move once again took the Nasdaq into new highs on the year and broke it free from the range we've been following over the past couple of weeks.

The market pulled back gradually into 11:30 ET. Volume declined throughout the move, indicating a lack of motivated sellers. By the time the 12:00 ET correction period had hit they were again trying to push higher off support. In the Dow this was trend channel and 15 minute 20 simple moving average support, while the 5 minute 20 sma held in the S&P 500. This time the momentum was a bit more subdued in the Nasdaq as compared to the stronger upside earlier on. Once again the market pushed to new highs, moving quickly into the upper trend channel just after noon.

This third wave of buying on the 5 minute time frame exhausted the trend move so that even when the indices pulled into support a third time into 13:00 ET, they weren't able to push through the previous highs. The afternoon was still a bit up in the air though since the momentum had not yet changed, but it soon did just that after falling through the 5 minute 20 sma into 13:30 ET. Support hit quickly but once again the market just could not shake the support zone. The indices climbed slowly higher over the next hour and then just fell apart as the 15 minute 20 sma support that had been holding up the market gave way.

If it hadn't been for the final hour of trading on Monday, the market would have had a pretty nice day. That late day decline, however, took back a huge chunk of the day's gains in the Nasdaq Composite ($COMPX), nearly all of them in the S&P 500 ($SPX), and all and then some in the Dow Jones Industrial Average ($DJI). The Nasdaq managed to hold onto 20.34 points, but the S&Ps gained only 2.35 points. The Dow lost 13.65 points. Among the top gainers were AT, WYE, COP, ICE, CRM, AMZN, AAPL, FMCN and FWLT. With the late day correction, the market is likely to hold those highs Tuesday morning. The Nasdaq still has a lot of room to move up on the daily charts, but the Dow is likely to struggle a bit more in comparison now.







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.