The market continues to fall in afterhours trading. This leaves the door wide open for a retracement in the Dow back to the 13,000 level with the market easily testing the price congestion from August and early summer.

Yesterday's late day breakout took the indices out of the trading range that had been in place since Friday, and the market now has a bit higher odds of forming a daily triangle instead of an immediate continuation lower.

After the day's third wave of buying, the market found itself without solid footing and it slipped slightly lower into the close. Toni Hansen is still leaning towards continued selling with the 20-day sma serving as resistance in the indices.

Toni Hansen believes it is reasonable to expect the Nasdaq to continue to perform somewhat better than the rest of the market, but when selling does hit, it will then have more room to fall than the others.

The zone of the 20-day simple moving average resistance held in the S&P 500 and Dow, and this could be the start of that second wave of selling on the daily time frame that Toni Hansen's been expecting.

As news continues to pour out in the form of earnings, Toni Hansen's focus is going to remain on the premarket gainers and losers lists. There have been a lot of nice gap plays this week and she expects this to continue until earnings season begin to taper off.

The indices often move higher in the hours before a Fed announcement. There have been a lot more exceptions to this tendency in recent months, however, so it is not something Toni Hansen relies on completely for a morning bias.

The Nasdaq Composite ($COMPX) hit a new 52-week high. Other indices have risen to a lesser degree and are in line with the typical price reaction following a move such as on Friday. It would now be normal to see some retracement again on Wednesday.

Toni Hansen believes that the market will congest before it decides to either gain momentum or fall through the support and back into the congestion from mid-August.

As we head into the new week, this bearish phase of the market looms, but Toni Hansen believes that there will be one more wave of upside on the weekly time frame before this larger uptrend really reverses.