Market Gives Back Gains Following Quarter-Point Fed Rate Cut

Good day! A typical Fed day begins with upside in the morning. On Wednesday the market held that bias quite well. After a slight gap higher, the indices formed a two-wave continuation pattern along the highs on the 5 and 15 minute time frames. They began the previous afternoon at highs on the intraday time frame and at 8:30 am ET on the all sessions time frame, so the pattern formed on several levels. I drew the 15 minute ES setup on the chart below.

The Commerce Department released the first quarter gross domestic product data ahead of the open on Wednesday. First quarter estimates came in with a 0.6% growth, larger than the 0.2% anticipated. The number was a bit deceptive, however, because 0.8% was attributed to inventory building and final sales of domestic product fell 0.2% with final domestic sales falling 0.4%. This was the first decline since the 1991 recession.

In other news, Procter & Gamble (PG) and GM (GM) both posted better-than-expected earnings. This helped set the tone for the Dow, which would end up leading the market higher throughout the morning. The early buy pattern in the indices triggered at 10:30 ET. The S&P 500 lagged ($SPX), but it also broke higher out of the 11:00 ET correction period while the Nasdaq Composite ($COMPX) and Dow Jones Industrial Average ($DJI) each formed continuation patterns at that time.

Once the Nasdaq broke, it moved steadily into new intraday highs, thus making new highs on the month as well. The Dow used its late morning strength to propel it back into Monday's highs. This served as a solid price resistance level in the indices and it hit at the same time as the 11:15 ET correction period, helping to trigger a pullback into the early afternoon.

Volume began to decline sharply following the late morning reversal. Many market participants began to take to the sidelines ahead of the afternoon Fed announcement. The mid-day correction was fairly gradual overall, first leading to a pullback into the 5 minute 20 period simple moving average, followed by an avalanche on the 5 minute time frame at 12:00 ET that created a second wave of selling into the early afternoon. Corrective moves within a larger trend often take the form of two waves, so this created a buy setup into the 13:00 ET correction period, but the market was not too enthusiastic given the looming interest rate news.

The market fell into a trading range on the 15 minute time frame with the 15 minute 20 sma as support until 14:15 ET. The Fed once again lower the interest rates, cutting it by another quarter-point to 2%. This was what the market had been expecting, although there was speculation that they would pause rate cuts for the time being. This speculation helped create a bit of a relief rally immediately following the announcement, but as soon as the news settled the bottom began to give way. The old "buy the rumor, sell the news" adage comes to mind.

The Dow had shot back into the 13,000 price resistance level immediately after the rate cut was announced, but this price level merely served as resistance. The S&Ps were also hitting Monday's highs immediately following the news and this resistance level provided another reason for the buyers to start to hold off. A bearish triangle quickly formed on the 2 minute time frame along the 5 minute 20 sma. It triggered at about 14:45 ET and as soon as the lower channel gave way the bears returned with a vengeance.

As I warned throughout the week to date, whenever the market creeps higher, such as it has done over the past two weeks and as it did on the 15 minute time frame coming off Tuesday's lows, the odds are quite high that the downside will be extreme once the channel gives way. The 15 minute channel did so with almost no hesitation, quickly plunging the indices back to Tuesday's lows and their 15 minute 200 period simple moving averages. The weaker S&Ps managed to break through these support levels a bit, but the Dow and Nasdaq held them quite well and these price levels stalled the descent at about 15:10 ET. The market did attempt to breakdown once again into the close, but the move did not have much time to follow through and did not go too much further immediately after the closing bell either.

The Dow ended the session on Wednesday at 12,820.13, down 11.81 points, or 0.1%. 16 of its 30 components posted losses on the day with Citigroup (C) (-3.99%) and Hewlett Packard (HPQ) (-3.11%) leading those losses. On the month as a whole, however, the Dow gained 4.5%. The S&P 500 ($SPX) fell 5.35 points, or 0.4%, and closed at 1,385.59. This brought its monthly gains to 4.8%. The Nasdaq Composite ($COMPX) lost 13.30 points, or 0.5%, on Wednesday and closed at 2,412.80 for a 5.9% gain in April.

Although the post-Fed drop took the indices through their 15 minute channel lows very quickly, the daily channel remains in place. The market tested the lows of that channel on the late-day decline, as shown on my charts below. It still remains very easy for the same type of action which took place intraday on the 15 minute charts to now form on the daily time frame. As a result, I am very cautious on any plays on the long side at this time and will be favoring shorts. It would not take much for the 20 day sma to break to the downside.


Dow Jones Industrial Average ($DJI)



S&P 500 ($SPX)



Nasdaq Composite ($COMPX)

Trade Wrapup - 20080430

Trade Wrapup - 20080430

10:28 YM (12873) and ES (1395) forming 5 min "D" patterns which begin at 15:00 yesterday
Breakout Template: For information on A, B, C, D, or Z template patterns, please see http://tradingfrommainstreet.com/images/roomexamples/BREAKOUT_TEMPLATE.gif The green circle is the entry with the red bar as the stop.
also at about 8:30 am this mornign all sessions charts
NQ also (1945.50)
10:33 NQ triggered... good start... YM also moving well
10:38 first resistance showing (1948.5 NQ, 1396.25 ES, 12887 YM)
10:45 futs reacting here to that first resistance levels... congestion
10:54 futs second resistance hitting (1950.5 NQ, 1396.75 ES, 12905 YM)
11:02 YM is certainly the leader on this "d" cont pattern. it is coming into price resistance from the 28th with that congestion at highs
11:05 (1950.5 NQ, 1397.25 ES, 12915 YM)

10:30 GPRO still basing (at highs from previous session)

10:30 Fed today so expect even slower action into early afternoon

11:12 RESISTANCE coming into 11:15 correction period

11:44 RAI is basing at lows.... not too fond of the slightly lower lowe in the base.. that is a con - 54.24-54.44 entries, 53.25 target
12:28 want rai to hold 5 min 20 sma resitance which iw about 54.42
12:43 RAI is testing the 5 min 20 sma... need to see it hold
14:23 was not brave enough to hold bmrn and rai through the fed but both actually holding the pattern still and rai making new lows.. could have easily re-entered... i missed it though just now
14:46 first support here on RAI' - note: "managed to get some RAI short at 54.97 at 14:37 ET.. just protected part at 53.54... looking for 53 rest... 5 min 20 sma is resistance"
15:15 53.93 RAI trailing stop

11:51 BMRN base at highs 36.50-36.60 entries, 37 initial target
14:23 was not brave enough to hold bmrn and rai through the fed but both actually holding the pattern still and rai making new lows.. could have easily re-entered... i missed it though just now
14:29 BMRN i'd go ahead and exit if not already done so ahead of the fed.. forming 5 min avalanche (36.35)

12:04 RESISTANCE YM is hitting prior highs on the 5 min here

Jacob : Toni, I hope you don't mind my asking a question. Is your "D" pattern mentioned this morning the same thing as your "2B" from your Pattern Reference Guide?
Toni : no.... the D can be found on this template:
http://tradingfrommainstreet.com/images/roomexamples/BREAKOUT_TEMPLATE.gif The green circle is the entry with the red bar as the stop.
a D setup can have a 2B in it though. if the second low is slightly lower than the first and its a reversal pattern off lows, but it is also a continuation pattern. essentially its a two-wave pullback pattern

11:55 hmm.. i may be done until after the fed... not finding much
12:18 risk is going to remain higher on anything into the fed

12:30 SUPPORT this is 15 min 20 sma on the es and nq
13:10 this is some initial resistance on the bounce off that 15 min 20 sma zone

14:14 RESISTANCE ES hitting monday highs

14:26 SUPPORT ES and NQ both pulled back to the 30 min 20 sma levels off that resistance and these are serving as support

15:15 SUPPORT: this is NQ 29th lows as support btw

Market Holds Trading Channel

Good day! As discussed in my last several columns, the market has been in a choppy trading channel on the daily time frame since the 18th. I had been expecting the market to continue to hold that channel at the beginning of this week and so far the market has obliged. On Monday the indices had tested the upper end of that channel on light volume and with slowing momentum. This allowed the indices to break lower into the close. The pattern was large enough on the 15 minute time frame that it was also able to continue into Tuesday morning, bringing the market back to the lower end of that larger channel within the first 90 minutes of trade.

Although Tuesday's session began with the weaker bias thanks to the 15 minute reversal pattern which had triggered the prior afternoon, the selling did not increase again until the Conference Board released its April consumer confidence reading. The consumer confidence index fell from an upwardly revised 65.9 in March to 62.3 in April, which is its lowest level since March 2003. It was higher than the 61.0 expected, but it was not enough to hold up the the market and a second wave of selling began immediately.

In other news on Tuesday, U.S. home prices continued to fall, down 2.6% from January according to the Case-Shiller home price index measuring 20 key cities. This means that for the past year home prices have fallen a record 12.7%. Prices are expected to continue to decline with the largest losses in Las Vegas and Miami, both of which have fallen by more than 20% in the past year.

Following the morning's economic data, the downside continued in the market until the S&P 500 ($SPX) and Dow Jones Industrial Average ($DJI) both hit their 15 minute 200 period simple moving averages at the same time as the 10:45 ET correction period. The Nasdaq Composite ($COMPX) found support a bit sooner at the opening lows at 10:30 ET. The reaction off these support levels was decent, but not extreme. The Nasdaq experienced the strongest reaction, popping quickly to the 5 minute 20 sma. The greater strength throughout the morning, as well as this earlier and stronger move off support, made it easier for the Nasdaq to show the greatest strength throughout the afternoon as well.

After the initial move off support took place, hitting highs around 11:30 ET, the market began to pull back once again. This time, however, the momentum was very gradual and volume dropped on the pullback, creating a nice 5 minute buy setup that triggered early on in the afternoon. A continuation of this setup took place out of the 13:00 ET correction period and took the indices through their 15 minute 20 sma resistance levels. The Nasdaq also used this breakout to move to new highs on the day. It rallied all the way back into the zone of Monday's highs.

The market stalled once again shortly after 13:30 ET, but the correction was once again a mild one. The 5 minute 20 sma held as support, as did the lower trend channel, and at 14:30 a final wave of buying took place, bringing the S&Ps and Dow back into Monday's close as price resistance. This hit with the 15:00 ET correction period. I had been watching for a final move higher into the close, but the market rounded off at highs before pulling back and nullified that possibility. Although the 5 minute 20 sma and lower trend channel stalled the move on the downside at 15:30 ET, the roll over off highs made it easy for the support to break and the market to continued lower into the close and afterhours trade.

Both the ES (S&P 500 Emini futures) and YM (mini-Dow futures) were able to return to the zone of the intraday lows at about 16:15 ET, although the Nasdaq still managed to hold up well and only retraced to the 38% fibonacci level. The upside was then able to resume and the indices futures performed well into the late evening hours.

At the closing bell, the Dow had fallen 39.81 points, or 0.3%. It ended the day at 12,831. The S&P 500 lost 5.43 points intraday, or 0.4%, and closed at 1,390. The Nasdaq Composite gained 1.7 points, or 0.1%, and closed at 2,426. Top sectors included airlines, telecommunications, health care, and technology. Sectors performing poorly on Tuesday included gold, oil, pharmaceuticals, and natural gas.

Several big-name companies reported earnings ahead of the open on Tuesday, but they had very little impact on the market as a whole as the session began. MasterCard (MA) more than doubled its profits, reporting a 29% increase in revenue. It gapped sharply higher to break the upper trend line of its daily uptrend channel and closed higher by 13% (+$31.48). Corning Inc. (GLW) also rallied into Monday's open after it tripled its first-quarter profit on LCD sales. It pulled back off highs about 35 minutes into the session, but still gained 3.3% (+$0.85) on the day. BP (BP) has also been on a run lately with oil hitting highs and it jumped another 4.6% (+$3.20) on Monday after it beat analyst estimates.

Offsetting the gains made by the likes of MA, GLW, and BP was the rejection of Merck's (MRK) cholesterol drug Cordaptive by the Food and Drug Administration. MRK has been suffering a sharp decline since the beginning of the year and it took a hit with another 10.4% (-$4.30) loss by the end of the trading day on Monday after trying to find a foothold over the past month at lows.

Wednesday's session brings with it another Fed rates announcement. Expectations are for another quarter-point rate cut. Odds are beginning to increase that the Fed will pause its rate cut trend into the summer. There is some speculation that they will begin to do so on Wednesday, but overall most anticipate this to begin with the next meeting instead.

With any Fed day, however, the market tends to begin the session with an upside bias intraday and then a slowdown over noon and into the rate announcement. Then the market will experience several reactive waves, typically in groups of three with an initial reaction, followed by a counter-reaction, and then continuation of the initial move. Use a great deal of caution in pre-Fed and immediate post-Fed trade. The market is still in the trading channel it has been stuck in for the past two weeks. I am favoring a sharp breakdown once the channel gives way, but it can still hold for a few more days if there is not an extreme negative reaction to the Fed.

Dow Jones Industrial Average ($DJI)



S&P 500 ($SPX)



Nasdaq Composite ($COMPX)

Trade Wrapup - 20080428-29

20080428 - I was out of the office on Monday, so hence there were no trades or commentary for this day.

20080429 - Trade/Commentary Wrapup

11:28 NQ resistance here at prior highs (1931)
11:57 NQ first support coming off that pivot high (1927)
12:10 second support NQ (1925.25) "this is for the reversal off highs, not a buy"
12:18 "covering last of NQ" (1924.5 .. 1923.25 was low)

NQ Correction off highs


11:52 CF base at lows ($138.80) 5 min.
11:54 Mykonos : CF dying
12:13 CF 131 is initial target (hit 131.05 shortly thereafter)
12:14 hitting target zone
13:17 trailing stop hit on rest of CF (lows 130.52)

CF Short Setup


13:00 FLS watch for 5 min bull flags this afternoon
14:20 FLS off watch

FLS Desired Buy Setup - No trigger


15:03 GPRO base at highs 15 min on daily channel breakout looking to close feb gap
15:50 gonna watch that GPRO for tomorrow.... see if we can get a morning play on it

GPRO Buy Setup - Not yet triggered... watching for Wed. morning


15:05 YM hit yesterdays closing prices and serving as resistance on the 5 min

YM Resistance for correction


15:06 looking at 5 and 15 min indices for chance at another push higher before the close for a bull flag
15:06 the 5 and 15 min 20 sma is the support for a flag - nas will have the hardest time - has the greatest extension already
15:21 got rounded highs a bit here on the futs... that is not what i wanted to see for a flag

Market Pushes Higher on Light Volume

Good day! Trading was quite slow on Monday. Volume was light and the indices were stuck in a narrow uptrend channel throughout most of the session, creeping higher without any strong overall bias. We had been expecting the daily channel to hold early this week and Monday's session did not disappoint in that regard.

The week began relatively unchanged from Friday's closing levels. A bullish range formed out of the open with a slow retracement to the 5 minute 20 period simple moving average, but the market was unable to get going when the range attempted to break higher at 10:10 ET. Volume remained light for morning trade and the indices appeared glued to their 5 minute 20 period smas.

When the 11:00 ET correction prior hit the market attempted to break the support. This move also lacked conviction, however, and the morning congestion held. Momentum failed to shift to any significant degree and, although the indices returned to highs and even pushed through them into the early afternoon, they failed to to confirm any larger directional bias. The 5 minute 20 sma again became support and the market slowly crawled higher into 14:00 ET.

At 14:00 ET the indices hit their first substantial intraday resistance when the Dow tested the zone of last Thursday's highs. This corresponded to that 14:00 ET correction period and the market attempted another correction off the upper end of the day's trend channel. Although the downside momentum increased somewhat, it was even more nominal than the 11:00 ET pullback and found support at the 15 minute 20 sma.

This 15 minute 20 sma level had been keeping pace with the prices action since late morning and prevented the market from quickly breaking lower into the final two hours of trade. It was not enough, however, to prevent a larger correction from taking place. Whenever the indices creep higher the risk is also high that once support gives way it can do so rather quickly. Although the 15 minute 20 sma held at first, the indices congested along that level and at 15:15 ET the market broke down. In the final 45 minutes of trade the indices displayed the strongest momentum of the session, taking the market back to the lower end of the day's range with the S&Ps leading the selloff. The 5 minute 200 sma served as support just prior to the closing bell.

The Dow Jones Industrial Average ($DJI) fell 20.11 points on Monday, or 0.2%, and closed at 12,871 with 17 of its 30 components lower. The S&P 500 ($SPX) also lost ground, falling 1.47 points, or 0.1%, to 1,396. The Nasdaq Composite gained 1.47 points. It closed at 2,424.

Leading the news on Monday was an announcement by privately held Mars, Inc. to buy Wrigley Jr. (WWY) for $80/share. The purchase is to be backed by Warren Buffett's company, Berkshire Hathaway Inc. (BRK.A/BRK.B). WWY had closed on Friday at $62.45/share. The purchase price is based upon four times sales and 35 times WWY's 2007 earnings per share. Wrigley will become a subsidiary of Mars with Berkshire Hathaway making a minority investment. Additional financing will be provided by Goldman Sachs (GS) and J.P. Morgan (JPM).

Ford Motor Co. (F) was also making headlines on Monday. F has been in a strong uptrend since mid-March. The stock pushed past $8.50 on the 24th after it reported earnings for the quarter of $100 million, or 5 cents a share. It blew away estimates, gapping higher and continuing to run throughout the morning. Although it pulled back following this exhaustion move into the weekend, it jumped higher once again on Monday when Kirk Kerkorian's Tracinda announced that it planned to offer $8.50/share for up to 20 million of Ford's shares.

The focus over the next two days will be on the Fed. on Wednesday it will be announcing its latest rate decision. While many expect them to lower rates by another quarter of a point, it is quite possible that they choose to halt the rate cuts at this point. My stance on the market's outlook this week has not changed. I continue to expect back and forth action with a slight bullish bias pacing higher with the 20 day sma. This will leave the market vulnerable for a more rapid breakdown when the next daily correction off highs gets under way.

Dow Jones Industrial Average ($DJI)



S&P 500 ($SPX)



Nasdaq Composite ($COMPX)

Heavy Earnings News and Economic Data to Influence This Week's Trade

Good day! The market is going to be heavily influenced by another week packed full of earnings reports as well as some very hefty economic data. Stocks to watch on Monday include Verizon (VZ), which is expected to report first-quarter earnings of $0.62/share; Humana Inc. (HUM), which expected to report Q1 earnings of $0.48/share; and Tyson Inc. (TSN), which is expected to report a fiscal Q2 profit of $0.02/share. Visa (V) also reports on Monday and expected to report earnings of $0.45/share for fiscal Q2. ADM, BP, BNI, CFC, ODP, X, and VLO are top names which report on Tuesday.

The most notable event on the economic front will be Wednesday's Fed interest rate decision. It is anticipated by many that the Fed will once again lower interest rates, this time by a quarter percentage point to 2%, although there is no strong consensus that the the Fed will in fact make another cut at this time. Speculation is increasing that the Fed will hold off on further cuts for the time being as a result of the rather worrisome increase in the price of food, energy, and commodities. The continued decline in the value of the dollar is also widely cited as a reason for the Fed to halt rate cuts.

Early in the day on Wednesday, the Commerce Department will be releasing the first estimates for the first-quarter gross domestic product. Economists as a whole are expecting very little change in the overall numbers for this past quarter, with perhaps an exception in terms of some growth in exports and declines in residential and business investment.

On Thursday the Institute for Supply Management will be reporting its latest index reading. The monthly ISM index report is a national survey of the manufacturing sector which examines new orders, production, employment, deliveries, and inventories, and is one of the widely watched economic indicators. Overall, a reading over 50% indicates expansion, whereas a reading under 50% indicates contraction in the manufacturing sector. A reading in the low 40s tends to correspond to periods of recession. The ISM index for April is expected to drop to 48.0%, as compared to 48.6% in March. Since exports factor into the monthly reading, they will likely assist in holding that number above the low 40s for the time being.

The week will end with the latest unemployment data. During a recession, payrolls fall and unemployment levels rise. April marked the fourth month in a row that payrolls have declined. Job losses are expected to be most prevalent in manufacturing, construction, financials, and retail. Once again, strong exports are expected to inflate the numbers. The unemployment rate for April is expected to increase only slightly from 5.1% to 5.2%.

Going into Friday session I had been anticipating another day of back and forth activity without a strong intraday trend. Given the failed early upside breakout attempt the day before, I was particularly leery on the side of the bulls. The day began with very little difference between Thursday's closing and Friday's opening price levels in the major indices. Within the initial 15 minutes of trade the market held those levels. As the 9:15 ET correction period hit, however, the bears again regained control, continuing the selloff pattern which had began late in the prior session. This selloff continued into 10:00 ET.

At 10:00 ET the University of Michigan released its U.S. Consumer Sentiment index. It is currently at its lowest levels since 1982, falling from 69.5 in March to 62.6 in April. The data was no worse than had been expected. From 10:00 to 10:30 ET the indices corrected somewhat off their early morning lows. The 5 minute 20 period simple moving average served as resistance, but a 30 minute correction following 30 minutes of selling is typically not quite enough time to allow for the market catch its breath. The previous lows held as support and the indices fell into a base along those lows into the 11:00 ET correction period.

The downside continued at 11:00 ET, taking the indices to new intraday lows. This late morning breakdown brought them into the range from earlier in the week. I had been looking at the lower end of that range as support. The Nasdaq did make it back into the lower end of the range from Wednesday into Thursday morning, but the other indices held mid-range. The S&Ps had hit equal move support at that time on the morning's continuation when compared to the previous afternoon. This is a rather significant form of price support and the market was able to bounce off this level and back into the 5 minute 20 sma.

The shallower price retracement aided in the formation of a stronger late day reversal. It began with a large shift in momentum mid-day. The indices congested along the 5 minute 20 sma zone for two hours. The Nasdaq formed a double bottom on the 15 minute time frame and the market took off as the 14:00 ET correction period hit. This is a very common time of the day for major market moves to begin as well as end. The upside built on itself throughout the remainder of the afternoon with the Russell 2000 ($RUT) leading. The S&Ps and Dow followed, but the Nasdaq lagged.

The Russell 2k and S&P 5000 were able to make new highs on the session in the final hour of trade. The Dow Jones Ind. Ave. ($DJI) hit resistance at the morning highs with about 40 minutes of trade left. At this time the S&Ps had also ran into resistance at Thursday's highs and the Nasdaq Composite ($COMPX) was testing its open. All of these resistance zones hitting at once put a damper on the bullish sentiment and the buying stalled with the afternoon highs holding into the close.

The Dow ended the week higher by 0.4%. On Friday it gained 42.91 points, or 0.3%, and closed at 12,891.86. American Express Co. (AXP) was one of the top gainers after it reported a first-quarter loss that was less than had been anticipated. The S&P 500 closed higher on the week by 0.5%. It had been in negative territory, but the 9.02 point gain on Friday added 0.7%. It closed at 1,397.84. The Nasdaq Composite gained 0.8% on the week as a whole, but it closed lower on Friday by 0.2%, or 5.99 points, at 2,422.93. Leading sectors on Friday included energy, broker/dealers, and banking, while technology stocks led the decliners.

I think that we can continue to see the market step higher early this week. I expect that there will still be a great deal of overlap in price from one day to the next without the indices adding much difference between the current price levels and the 20 day sma. This is about 35-40 points on average in the Nasdaq and about 120 points in the Dow. A market which creeps higher can turn very quickly, so this is something that should be kept in mind given this scenario.

Dow Jones Industrial Average ($DJI)



S&P 500 ($SPX)



Nasdaq Composite ($COMPX)

Economic Reports and Earnings Events This Week : Apr. 25 - May 2

Economic Reports and Events This Week

Monday, April 28, 2008
10:30a.m. Apr Dallas Fed Mfg Production Index. Previous: 13.6.

Tuesday, April 29, 2008
7:45a.m. ICSC Chain Store Sales Index.
8:55a.m. Redbook Retail Sales Index.
10:00a.m. Apr Conference Board Consumer Confidence. Previous: 64.5.
5:00p.m. ABC/Wash Post Consumer Conf.

Wednesday, April 30, 2008
8:30a.m. 1Q Advance GDP. Previous: +0.6%.
8:30a.m. 1Q Employment Cost Index. Previous: +0.8%.
9:45a.m. Apr Chicago PMI. Previous: 48.2.
10:30a.m. Crude Inventories
2:15p.m FOMX Policy Statement

Thursday, May 1, 2008
8:30a.m. Initial Jobless Claims For Apr 26 Week.
8:30a.m. Mar Personal Income. Previous: +0.5%.
8:30a.m. Mar Personal Spending. Previous: +0.1%.
10:00a.m. Apr ISM Manufacturing Business Index. Previous: 48.6.
10:00a.m. Mar Construction Spending. Previous: -0.3%.
10:00a.m. DJ-BTMU Business Barometer For Apr 12.

Friday, May 2, 2008
8:30a.m. Apr Nonfarm Payrolls. Previous: -80K.
8:30a.m. Apr Unemployment Rate. Previous: 5.1%.
10:00a.m. Mar Factory Orders. Previous: -1.3%.


Key Earnings Announcements This Week:

Monday, April 28, 2008
Before: ACV, ARLP (?), BEAV, BWP, CG, CNA, CORS (?), COT, DCO, DEP, ENDP (?), EPD, FSNM, HUM, IHP, KDN, LTR, MGLN (?), MAG, MC, MOG.A (?), NTY (?), ONB, PVTB, RSH (?), RDWR, SSW, SOHU, SYY, TSN, VZ, V, WWY
After: ACTS, ACTU, AATI, ALGT, AMCS (?), NLY (?), ATHR, AXS, BLDP, BKHM, CHH, CGNX, CVD, DGII, EDR, EEP, FIC, FLS, FTI, FELE, GPRO, GERN (?), HGR, HIG, HCP, ININ, IVAC, JDAS, MTW (?), MIG, MTH, MCHP, PRE, PBI (?), PCL, PPS (?), STR, RADN (?), RCII, RKT, SBCF, CONO, SFN, STM, TXRH, TSS, TRID, TZIX (?), UCTT, VECO

Tuesday, April 29, 2008
Before: CAS, AG, ANPI, ADM, ARM, ASH, AVP, BLC, BMS, BYD, BP, BNI, CRS, CEVA, GIB (?), CVG, CYNO, DHX, DXYN, ENR (?), FDP, GKSR, SVHR, GPI, HSII, HEP, HUN (?), ICLR, KNSY, KSWS, LDR, LCAV, LEA, MSO, MAS, MA, MHP, MHS, MYGN (?), NURO (?), NXY (?), ODP, GLT, PAG, PER, PCZ, RDS.A, SMG, SEPR (?), SINT, SPG, SIRI (?), SAH, TSM, TECH (?), TFX, TIN, TPP, TEVA (?), TSCM, TT, TUES, X, UA, VLO, VSH, WMI, WEC
After: ACE, ADVS, ATAC, ALGN, ECOL, AMMD, ARRS, AUDC, AVR (?), BMRN, BXP, BRE, BTUI, BPL, CSCD, CTV, CYH, CNXT, CTS, CYBS, DVA, DENN (?), DRH, DBTK, DWA, DRC (?), EGLT, EQ, EPIC, EQY, ESRX, FEIC, FLEX, FORM, GGP, BGC, GMKT, HRS, HSTX, HS, HIMX, HTCH, JLL (?), KEYN, KFRC, LFL, LFG, XPRT, LNC, LAD, LIZ (?), LNET, MASI, MOH, MPWR, MRH, MOSY, NANO, NATI, NCIT, NETL, HAL, OIS, OTEX, PACR (?), PNRA, PDFS, PLNR, PLT, RSYS, RNR, RUTH (?), SVVS, SCSS, SMI, SHOR, SWIR, SIMO, SSTI, SNWL, SPSS, STAR, SDXC, TE, TRMA, TRLG, VIMC, VPRT, WTS

Wednesday, April 30, 2008
Before: ACW, ALU, ALEX, ALXN, AMED, APU, AACC, AUXL, AVA, BEC, BLT, CACH, CBI, CDI, CNP, CBB, CINF, CL, CEG, COCO, CRY, CMI, DF, ELON, EEFT, FSLR, FORR, FPL, FTD, GRMN, GEO, GOL, GLF, HW, HNT, HES, HPT, INCY, IR, IACI, IPG, IP, IONA, JNY, K, KFT, LFUS, MHO, MWV, MPS, NOV, NTMD, NJR, NOVN, OZM, ZEUS, ORCT, PTI, PNW, PLUG, PMI, PG, RAS, RBC, RHB, RAI, ROC, RSTI, SAP, SEE, SLAB, SPIL, SKYW, SO, SPW, STRA, BRLC, TLM, TSTY, TWX, TWC, TKR, TRS, TRX, TRW, UGI, UIS, UMC, VPHM, VC, WBC, WMAR, WST, WXS
After: ARAY, AKAM, AYE, AIQ, AW, AMKR, ARNA, AHT, ATML, AVB, CAR, AXTI, BLOG, BDN, CBT, COG, CAI, CALD, CBL, CDR, CTX, CEDC, CNQR, DCGN, XRAY, DNEX, DTE, DRCO, EQR, FARO, FISV, FBN, GNK, GMR, GHDX, ROCK, GLUU, GW, GSIG, HVT, HLX, INTX, IRBT, ISTA, ITRI, JDSU, KONA, LHCG, LOOP, MANT, MCGC, MCRS, MIL, MIPS, MRT, MUR, NVT, NBIX, NEWP, NVEC, OIIM, OII, ODSY, OMTR, OKE, OKS, OI, PSEM, PAA, PPO, PRU, PSYS, RADS, O, RNOW, SAF, SGMO, SBAC, SCRX, SFLY, SBUX, STNR, SUNH, SYMC, SMMX, TTEK, TWTC, TLGD, TRN, TTMI, ULTI, UDRL, UNM, URS, VIRL, VLCM, WCAA, WGL, WSH, XFML

Thursday, May 1, 2008
Before: SMLC, ABH, ASF, ADLR, EYE, AMRI, LNT, AMCS, ANSS, APA, AHG, ARQL, AIZ, ADBL, ADP, BKRS, BNT, BBI, BSC, BCO, BRKR, BKC, CVC, CALP, CAM, CNQ, CPLA, CSE, CAPA, CAH, CPHL, CBZ, CTIC, CETV, CTL, CKP, CSK, CI, CLX, CGPI, CMCSA, CITP, CDC, COWN, CUB, CVS, DWSN, DNR, DSX, DSCO, DTG, D, DPZ, DRQ, EK, EFJI, EMS, ELMG, EPL, NPO, ENZN, EQT, EXPE, XOM, FRP, FAF, FE, RAIL, GET, GEL, GTIV, GNA, GIL, GMCR, GHL, HAE, HTV, HPY, HP, HERO, HOS, HWCC, ITWO, ICON, ICTG, IFLO, IPSU, IART, IFF, ITG, IWA, IRM, JRC, KBW, KNDL, KIM, KNOL, LB, LANC, LPNT, LKQX, LOJN, CLI, MRO, HZO, MFA, MDS, MSA, MINI, NNN, NRP, BABY, NNDS, NEWS, NBL, NRG, NUS, NMX, OMX, OMG, ORCH, OFIX, OSK, OSIS, PTIE, PMTI, PRX, PKE, PCAP, PTEN, PCCC, PDGI, POZN, PDE, PEG, QCCO, PWR, KWK, RVSN, RRI, REV, RDC, SGK, SNN, SHOO, SSYS, SXCI, TWTI, TOC, THOR, THI, TBL, TWGP, TYC, TEL, ULBI, UNT, UTHR, VCI, VRX, VNDA, VICL, WPI, WNR, WLK, WMB, WPZ, WPL, WYN, XEL, XMSR
During: EPEX, FNET
After: ABAX, ACS, ARE, ACLI, AFR, ACAP, ARII, ARP, AMSF, ASCA, AOC, AMCC, ARTE, ATO, AVNX, RATE, BARE, BE, BEBE, BGFV, BBND, BPHX, BVN, CAB, CAMD, ELY, CPT, CBEY, CTLM, CAPH, CPHD, CEM, CHK, CQB, CRUS, COGT, CSTR, FIX, SCOR, CRAY, DRIV, DLB, HILL, DNB, BOOM, DIET, EHTH, RDEN, ENH, EVC, EOG, ERES, ESPD, EXAR, EXEL, FCN, GMST, GYI, GFIG, GCFB, HNSN, HL, HIFN, HIW, HMN, HYC, IDSY, IMMR, IUSA, IDTI, IBI, IN, ITMN, IWOV, SWIM, INXI, DMX, JSDA, KCP, KFN, LQDT, LPSN, LAVA, MXWL, MEDX, MET, MIDD, MWY, MNST, MORN, NABI, NCMI, NFG, NATL, NTCT, N, NR, NHWK, NXG, NOVA, NVTL, ORH, OSIP, PDLI, PEET, PSPT, PGTI, PHTN, PROS, PSA, QLGC, RMKR, RMD, RVI, SONE, SNTS, SGMS, SCUR, SGTL, SMSI, SNCI, FIRE, SRSL, SM, STAA, SPF, STAN, JAVA, SHO, SPN, SPSX, TWLL, TX, TRSA, THRM, TWPG, TMA, CLUB, TGI, TMWD, UPL, URI, USTR, CHIP, PAY, WLT, WWIN, WBSN, WRI

Friday, May 2, 2008
Before: AGU, ALE, AMT, AIV, B, BWA, CSAR, CVX, ED, DSPG, DUK, EVVV, FSS, FRPT, HPOL, ICE, SFI, KBR, LZ, MDU, NI, NT, NWN, ASGN, PPL, SRE, VIA.B, WY, WHQ
After: OTTR

Note: All economic numbers and earnings reports are in line with those compiled by Briefing.com. Occasionally changes will occur that are made after the posting of this column and some companies have not confirmed their time, so always double check when taking positions overnight during earnings season! (?) = Not yet confirmed at the time the list was compiled.

Market Rallies in Thursday's Trade

Good day! Over the past week the market has been correcting off this month's highs. The market had established a two-wave pullback on the 60 minute time frame into Tuesday's lows. This created the beginning of a buy pattern on that time frame. The activity from Wednesday upheld this pattern's development despite the downturn off the morning highs and gradual momentum on the upside into the close. What this did create, however, was a smaller 15 minute short setup in the form of a type of Avalanche setup. When the market hugs a support level with a lot of choppy trade, it become easier for that support to break.

The market opened relatively unchanged on Thursday. The channel from the prior afternoon along the 15 minute 20 period simple moving average gave way early in the session. Now, in addition to the larger 60 minute two-wave buy, the market was also forming a smaller setup of the same type on the 15 minute time frame. The drop for the second wave of selling on the 15 minute, however, was not as severe as it had been on the 60 minute. The indices rolled over at intraday lows between 10:00 and 11:00 ET and broke sharply higher at that time.

Whereas the market had stalled on the 60 minute time frame before offering a continuation of the larger buy setup, the indices did not experience any similar misgivings on Thursday and once the pattern triggered it continued to move decisively higher into the early afternoon. At about 12:15 ET the Dow Jones Industrial Average ran into the targeted highs from Friday. The Nasdaq had already tested those highs on Wednesday, so this breakout was from a third test of that resistance level. As many of you may already know, a third test of support or resistance is the one which is most likely to break.

At 12:30 ET the Nasdaq Composite began to correct. Volume dropped off as it slowly pulled back to form a bull flag on the 5 and 15 minute time frames. The S&Ps and Dow also had slowed their ascent at this time, however, they made two more tests of highs into 13:00 ET. Often this pattern will create a larger reversal, however, the market was still dealing with larger time frame bullish patterns. Volume dropped off sharply as the market pulled back slightly into 13:30 ET. Soon afterwards the correction broke higher to trigger another wave of upside on the 5 and 15 minute time frames.

The afternoon breakout was too premature to allow the market to create as strong of a continuation move as the initial late morning rally. It was enough, however, to bring the S&P 500 into its highs from Friday. That resistance hit just before 14:30 ET and all three of the indices rounded off at highs once that occurred. The momentum shift confirmed at 15:00 ET when a slower ascent off the 5 minute 20 sma began, leading to a breakdown in the final 45 minutes of trade which continued afterhours until all three of the major indices had given back a large percentage of their gains off the morning lows. The S&Ps and Dow fell back 50%, while the Nasdaq returned to approximately the 62% Fibonacci retracement level. These support levels held throughout the remainder of Thursday's afterhours trading.

Thursday's primary session closed with a gain of 85.73 points, or 0.7%, in the Dow ($DJI). It ended the day at 12,848.95. American International Group, Inc. (AIG) led the gainers with a 7.09% rally after it lifted its profit forecast for the year. General Motors Corp. (GM) followed with a 5.59% gain following the surprise earnings from Ford Motor Co. (F) (+11.7%). The S&P 500 ($SPX) closed at 1,388.82, up 8.89 points, or 0.6%. The Nasdaq Composite gained 23.71 points, or 1%, and closed at 2,428.92. I am expecting Friday to be another choppy day. A pullback into the lower end of the daily channel again is quite possible by mid-day. Strong upside will be difficult in the indices as a whole.

In economic news on Thursday, the Labor Department announced that first-time claims for state unemployment fell 33,000 to 342,000. This is its lowest level in two months. U.S. durable goods orders gell 0.3% in March. This was as anticipated and February's data was revised higher. Meanwhile, sales of new homes fell 8.5% in March. This hit a 17-year low and was weaker than anticipated.

Dow Jones Industrial Average ($DJI)



S&P 500 ($SPX)



Nasdaq Composite ($COMPX)

Market Post Gains, but Fails to Hold Highs

Good day! Tuesday's trade left the market with a bullish bias into Wednesday morning. With the first-quarter earnings season now fully underway, however, the bias from the previous afternoon does not always follow through well into the next day. This time, however, earnings assisted this bias. Boeing Co. (BA) led the Dow's gainers after it reported a 38% profit increase. It gained 4.49% on the day. Broadcom (BRCM) was another major winner on Wednesday, adding 16.3% following its first-quarter results Tuesday afternoon.

The session began on Wednesday with another modest gap. This time it was on the upside. The open took place at price resistance from the late-morning congestion on Tuesday. This resistance held and the gap began to close. The S&P 500 ($SPX) and Dow Jones Ind. Ave. ($DJI) both closed their morning gaps rather quickly. The Nasdaq Composite ($COMPX), while it also fell out of the open, did not quite fill the gap completely, but it made an honorable attempt.

The S&Ps and Dow found support about 20 minutes into the day at the 5 minute and 15 minute 20 period simple moving averages. Prices rounded off at this support over the next 20-30 minutes. 5 minute bull flags triggered in the S&Ps and Dow out of the 10:15 ET correction period, while the Nasdaq triggered a two-wave continuation pattern in the form of a small cup-with-handle on the 2-5 minute time frames. This continued the upside bias that the market had in play heading into the day and the indices rallied steadily higher to close Tuesday's morning gap.

The morning rally took the Nasdaq back to its highs on the daily time frame which we had been targeting as resistance. The S&Ps and Dow did not quite make it back to Friday's targeted highs, however. After closing the gap around 11:45 ET, the market began to pull back. The momentum shift was enough on the smaller time frames to create a larger reversal. It confirmed when the indices formed a 5 minute Avalanche pattern between 11:30 and 12:00 ET and triggered into the 12:00 ET correction period with swift and decisive downside follow through.

The mid-day descent continued without interruption for more than half an hour. The momentum was some of the strongest we have seen on the downside in several weeks, but the volume was not substantial. The degree of the selling was still enough to take the market back to the area of the morning lows. The S&Ps surpassed them with a strong flush, but the Nasdaq slowed as it came into the early morning congestion and its 15 minute 20 sma and 5 minute 200 sma support.

The remainder of the session on Wednesday was quite choppy. The S&Ps and Dow hugged the lower end of their 15 minute 20 smas, while the Nasdaq hugged the upper end of its own. All three indices crept higher along the 5 minute 20 period sma, weaving back and forth, above and below it, into the close. This made afternoon trading in the indices themselves difficult throughout the majority of the afternoon.

The Dow closed higher on Wednesday by 42.99 points, or 0.3%, and 12,763.22. 18 of its 30 components were positive. The S&P 500 also gained 0.3%, or 3.99 points. It closed at 1,379.93. The Nasdaq Composite rallied 1.2% (28.27 points). It closed at 2,405.21.

The slow ascent throughout the afternoon made it easy for the indices to fall apart immediately in afterhours trade. The index futures on all three of the indices dropped to the zone of the session's lows before finding support around 21:00 ET. They were then able to turn over coming off that support and gained ground throughout the early morning hours on Thursday. With things where they stand now, the S&Ps and Dow are still within grasp of a retest of those Friday highs, however, it would not take much of a momentum shift for the correction off those highs to accelerate as they did several weeks ago.

Some of the names to watch out for on Thursday are as follows. Apple (AAPL) and Amazon (AMZN) both posted quarterly earnings on Wednesday after the close. AAPL forecast Q3 earnings of $1/share, which was under estimates, as were its quarterly sales expectations. AMZN's net earnings rose 30%, or 34 cents a share as compared to the 33 cent/share estimate. Its revenue also came in slightly ahead of expectations. Both stocks should be more active on Thursday followed this data.

A number of companies will also be reporting ahead of the open on Thursday and likely to experience strong intraday reactions. 3M Co. (MMM) is forecast to report a $1.36/share profit. ConocoPhillips (COP) is anticipated to report a $2.40/share profit. Dow Chemicals (DOW) is expecting a profit of 94 cents/share. For other earnings to come, please check the list below.

Dow Jones Industrial Average ($DJI)



S&P 500 ($SPX)



Nasdaq Composite ($COMPX)

Trading Journal Template

Hey gang,

The following is a copy of the trading journal template I designed a number of years back. To this day it remains a great starting point for any journal to help you analyze your individual trades and to use as a starting point for cross-trade analysis. Note: This journal template is copyrighted. I've come across copies of it on other sites since I created it, but if you choose to post it into another format, please be sure to reference the source! Thanks!

TRADING FROM MAIN STREET
DAILY TRADING JOURNAL
Please make sure you fill in every field. The more information you provide, the more it will help you when reviewing your logs.

DATE:
SYMBOL:
SECTOR (if known):
BUY/SHORT (circle one)
TYPE OF SETUP:

ANALYZING THE POSITION:
PROS:



CONS:



CURRENT MARKET CONDITIONS:



EXPECTATIONS:
PRICE TARGET:
REASON FOR PRICE TARGET:


ANTICIPATED RISK TO REWARD:
ANTICIPATED RISK LEVEL (rate 1 to 10 with 10 being high risk and 1 low risk):

ENTRY TIME(S):
ENTRY PRICE(S):
REASON FOR ENTRY AT THAT PARTICULAR TIME AND PRICE:



STOP PRICE AND WHY IT'S SET AT THAT PRICE (also note when the stop was adjusted and why):


EXIT TIME(S):
EXIT PRICE(S):
REASON FOR EXIT:



OUTCOME OF TRADE:
EXPECTATIONS MET? YES/NO (circle one)
TRADE ANALYSIS (Include thoughts on the trade such as what could have been improved, what you felt you did correctly, areas you may need to work on, etc.):







ATTACH A SEPARATE PRINT OUT OF ALL RELEVANT CHARTS FOR THIS TRADE. INCLUDE CHARTS FOR THE OVERALL MARKET WHEN APPROPRIATE. HAVING A VISUAL REFERENCE IS AS IMPORTANT AS A WRITTEN ONE.

U.S. Market Falls on Slew of Disappointing Earnings

Good day! The market had a tough session on Tuesday on the heels of disappointing earnings reports. The top Dow decliner was DuPont Co. (DD). The chemicals company beat by $0.03/share, reporting revenues that were in line, however, the company also warned that weakness in construction and automotive markets would hinder growth. DuPont fell 4% by the end of the day. Texas Instruments (TXN) was another major player to announce early this week. It had reported earnings after the close on Monday. A poor outlook for the second quarter led to a drop of 5.8% on Tuesday. Telecommunications networking company Tellabs (TLAB), which has been in a steady decline since the middle of last year, was hit further after it reported lower first quarter profit and a disappointing second quarter outlook. It lost 13.8% of its share value on Tuesday.

The cumulative effect of the earnings data which came out between Monday afternoon and Tuesday morning created a modest downside gap in the indices. This gap took the Dow Jones Industrial Average ($DJI), S&P 500 ($SPX), and Nasdaq Composite ($COMPX) under the 15 minute 20 period simple moving average. This was the same zone as the afternoon lows in the S&Ps and Nasdaq from Monday and served as a solid resistance zone to begin the session. Early activity in the S&Ps and Dow also brought those two indices under their 5 minute 200 period smas.

The indices fell into a period of congestion following the morning gap which lasted throughout all but the final 15 minutes of morning trade. Volume dropped as the congestion narrowed following 10:30 ET with the indices basing at the intraday lows. The congestion finally gave way at 11:45 ET on strong downside into new intraday lows. This created a second wave of selling on the 30 minute time frame for the S&Ps and Dow. The downside continued until these indices had established an equal move as compared to the selloff from Friday afternoon into Monday's morning lows.

The mid-day downside also took the form of two waves of selling. The first wave took it into the 12:00 ET correction period. It stalled there for about 15 minutes and then continued into the 13:00 ET correction period. This was where the larger equal move level hit and the S&P 500 and Dow were able to test the closing highs from the 17th, ahead of Friday's upside gap. This price support, the equal move support, and the correction period aligned with slowing downside momentum to create a high probability that the market would form another correction off support on the 15 to 30 minutes charts as the afternoon progressed. Since the prior correction took most of Monday's session to form, the odds were high that the correction on Tuesday afternoon would hold into the close. It could either create a bear flag to continue the downtrend, or this could be the second wave of a two-wave pullback and lead to a move back into highs on Wednesday.

The market did congest throughout the remainder of the day. There was a slight upside bias, but nothing to suggest the correction could not be leading into a larger bear flag. This was true, at least, until the final hour of trade. At that point the upside momentum picked up somewhat and the indices congested near afternoon highs until the final 15 to 20 minutes of the day. At that point a Phoenix pattern on the 5 minute charts broke higher.

The Dow closed lower by 104.79 points, or -0.8%, at 12,720.23. The S&P 500 fell 12.23 points, or -0.9%, to end the session at 1,375.94. The Nasdaq Composite lost 31.10 points, or 1.3%, and closed at 2,376.94.

The late day Phoenix setup followed through into afterhours trading with a strong surge higher that took the indices back into the congestion from the morning's activity. The bias remains bullish into Wednesday morning with Friday's highs as the larger time frame resistance. Once again, however, opening data is going to be much more reliable in offering a more accurate intraday bias than the afternoon data from the previous session.

Dow Jones Industrial Average ($DJI)



S&P 500 ($SPX)



Nasdaq Composite ($COMPX)

Trade Wrapup - 20080421-22

Hey gang... I am out most of the week, but have been popping in every once in awhile to post some things I'm seeing as I work on other projects.

Yesterday the only call I posted was Ryder Sys Inc. (R) for a breakdown short. It triggered early this morning after basing throughout yesterday at lows despite larger market strength.

R Short Setup


Today:
10:32 Futures support call for a reversal off lows as a bounce. This call was based upon a 100 tick momentum reversal pattern forming in the S&Ps and Dow and went on to hit the second target objective on this type of play.

Support


10:38 FCX given as base at highs for an upside breakout. Pattern breakout type A. It rallied for more than a point to hit initial target objectives at $121, but larger target of $122 was not met and the remainder was closed with a trailing stop. (This update posted at 11:22 ET)

FCX Buy Setup


12:28 Notice that IPI triggered a "D" style breakout. It triggered over $49.30ish and was trading about $49.75 when I posted, but was given as to watch for cont. of the pattern since this often will pullback a little and then go again. It is currently 12:31 and it it pulling back. $52.35 was given as target zone. This is an IPO though, so it can be rather volatile.

For information on A, B, C, D, or Z template patterns, please see http://tradingfrommainstreet.com/images/roomexamples/BREAKOUT_TEMPLATE.gif
The green circle is the entry with the red bar as the stop.

IPI Buy Setup


12:34 ET - ES Support Levels:
1373.68 ish is ES 62% fib retracement back to 17th lows
about 1370.31 is the 38% retracement back tothe lows of the 15th on the ES
it is also the zone of lows from the 18th
so those are some upcoming support levels to watch coming up
1366.75 is close from the 17th for the gap closure on the ES

13:14 YM Support: "YM just hit 38% retracement back to the 15th lows... also the price congestion from 16th highs and 17th afternoon into 18th morning... this was also equal move support in YM compared to drop from Friday highs to Monday morning lows"

13:33 NFLX low level base at whole number support from $30 with pattern for more downside.

NFLX Short Setup


Larger correction on 15 min time frame
13:33 charlie1 : Toni..do u see a rally this afternoon? inquiring minds want to know!
13:34 Toni-WeekOff : well we have a two-wave pullback now on the futures on the 15 min time frame
13:34 Toni-WeekOff : equal move levels hit 13
13:34 Toni-WeekOff : so this is a major support zone 13:34
Toni-WeekOff : need momentum to shift though
13:35 Toni-WeekOff : a 2B at lows would be good
13:35 Toni-WeekOff : if it can do that then the odds will be higher for an afternoon rally that is not quite as choppy
13:35 Toni-WeekOff : that is a risk if it just goes from here since the selling pace was pretty steep
13:36 Toni-WeekOff : the 15 min 20 sma is going to be resistance as it was yesterday
13:36 Toni-WeekOff : definitely expecting a larger 15 min correction though
13:36 charlie1 : good i can work with that!

14:23 Toni-WeekOff: watching this correction in the futures...might just turn into a 15 min bear flag.... still lots of room to correct but trying to correct more through time so far
14:23 charlie1: is selling today on light or heavy vol?
14:24 Toni-WeekOff: volume is a little heavy but not much
14:24 charlie1: good
14:25 charlie1: nothing to worry about unless it was heavy vol today
14:25 Toni-WeekOff: for judging time of this correction... look at ES or YM yesterday from lows to close
14:25 Toni-WeekOff: then compare to the move from
13:0014:26 Toni-WeekOff: can take up to that long if this turns into a flag
14:27 Toni-WeekOff: still too early to really say and have room for some more upside in he interim

13:41-Toni-WeekOff : NFLX going
13:42-xr3 : IPI too
13:42-Toni-WeekOff : :)
13:42-Toni-WeekOff : looks good $48.80 is support zone
13:44-Toni-WeekOff : 52.30is IPI target.. whole numbers will be resistance...so reasonably would be 52 area
[13:45- Toni-WeekOff : NFLX the 50 cent levels are price support[13:45] missed but still a buy
13:45 -chastain : IPI b/o
13:46 -Toni-WeekOff : initial target support here NFLX... looking for about 29 rest

13:55 the ISRG momo reversal as a swing from the 11th hit second target level btw.. did it yesterday but still trading there today (was short from between 338-340, depending on trigger used... trading 279 zone with lows in 275 zone)

I will try to find time later today to post some of the charts for the calls on Friday and this week so far. I will not be in the trading room much this week, but will be back next week all day. It's been a pretty nice week thus far for activity thanks to earnings! Wishing you guys well!

Market Corrects Following Last Week's Run

Good day! Although the Nasdaq Composite ($COMPX) held up rather well in Monday's session, the S&P 500 ($SPX) and Dow Jones Industrial Average ($DJI) struggled to recover early losses. Both had gapped lower by a decent amount at the open following weaker-than-expected earnings from Bank of America (BAC). BAC fell 2.5% after reporting that earnings fell 77% for the first quarter. By the close of the day the Dow had still lost 24.34 points, or 0.2%. It ended the session at 12,825.02.

American Intl Group Inc. (AIG) (-3.5%) and BAC were the two largest losers in the Dow, but Caterpillar Inc. (CAT) also posted losses over 2% (-2.29%). General Motors Corp. (GM) was the brightest of the bunch. It gained 5.7%. Microsoft (MSFT) came in second with a gain of 1.4%. In the other indices, the S&P 500 lost 2.16 points, or 0.2%, and closed at 1,388.17, while the Nasdaq Comp. gained 5.07 points, or 0.2%, and closed at 2,404.04. While financials dragged down the Dow and S&Ps, tech stocks helped the Nasdaq stay above water.

Most of the gains established by the market and the recovery from early morning losses took place in the second half of the trading day on Monday. The session began with a correction off last week's highs. The market bounced slightly following the downside gap and the Dow and S&Ps made it back to Friday's lows, while the Nasdaq closed its gap and found resistance at the 5 minute 20 period simple moving average. These price resistance zones hit about 20 minutes into the day and since the momentum was about average the indices held that resistance and were able to again push to new intraday lows.

The morning downside continued into 10:30 ET. The Nasdaq slid down its 5 minute 20 sma throughout the move, creating higher odds that the resistance would break to the upside. The S&Ps and Dow had a bit stronger downside momentum, but the selling stalled at the same time. A double bottom followed and when the 11:00 ET correction period hit the market reversed and began to move higher.

Most of the action on Monday was rather choppy in the indices as a whole. Although the market moved higher throughout the remainder of the morning and most of the afternoon, there was a lot of overlap in prices from one bar to the next on both a 5 and 15 minute time frame. The Nasdaq broke to new intraday highs very early on in the afternoon. When the S&Ps and Dow came into morning highs, however, and the Nasdaq hit the zone of Friday's highs, the bulls retreated. The market pulled back quickly off the afternoon highs, but was able to round off again at morning support between 14:00-14:30 ET and make their way to new highs on the day once more before the bell.

Although the index futures are down again afterhours, there is still some room for upside on Tuesday. The Nasdaq already began a third wave higher on the 60 minute time frame, so it has room to complete that move, but then I expect things to turn over into the afternoon and head back to the downside. Earnings are a major influence at present when it comes to where the markets are opening each morning, so I would suggest not relying as heavily upon postmarket analysis in the evenings,. Instead, come in ahead of the open each day to get a feel for where things stand as a result of the earnings and economic data that comes out each morning.

Dow Jones Industrial Average ($DJI)



S&P 500 ($SPX)



Nasdaq Composite ($COMPX)

Note

Hey Gang,

I'm taking the week off from trading to deal with some other things that have come up, but will be back next week with the wrapup! I will still be doing the nightly action letter, however.

All my best,
Toni

Market Soars on Earnings Data into Friday's Open

Good day! The market action on Friday was quite a contrast to a mere week ago. A disappointing earnings report early this earnings season from General Electric (GE) had sparked concerns that the current economic slowdown would negatively impact earnings across the board this past quarter. Over the course of the week, however, a number of top-name companies reported better than expected earnings and the indices made a strong recovery.

Strength on Wednesday was followed by a resting period on Thursday, but the upward momentum returned into Friday on the heels of earnings from Google Inc. (GOOG). GOOG had reported afterhours on Thursday and was up 10% immediately following the news. By the close on Friday it had gained 89.87 points, making a stellar 20% move. The earning results from equipment-maker Caterpillar Inc. (CAT) also helped boost the Dow Jones Ind. Ave. ($DJI). It led the Dow and closed higher by 8.51%, nearly retaking last year's highs. Another company which moved well on Friday was Honeywell Inc. (HON). It gained 6.3% on Friday.

In this coming week, 157 of the S&P 500 companies are due to report. This will be the busiest week for first-quarter earnings this season and expectations are for a drop of 14.6% as compared to the same quarter last year. Some of the major names to watch for early this week are Merck (MRK), Texas Instruments (TXN), Halliburton (HAL), and Eli Lilly (LLY) on Monday. On Tuesday Yahoo (YHOO), Dupont (DD), Fifth Third (FITB), SunTrust (STI) JetBlue Airways (JBLU), and Kimberly-Clark (KMB) are just a few that will be announcing. Apple (AAPL) and Amazon.com (AMZN) then report on Wednesday following the close, while Motorola (MOT), Amgen Inc. (AMGN), Microsoft (MSFT), and ConocoPhillips (COP) announce on Thursday.

The session began on Friday with an extreme upside gap. The futures had broken higher once again in the premarket around 6:00 am ET after having already posted substantial upside following the close the afternoon before. This activity took the market into the highs from the 7th, which we had been monitoring as resistance. In fact, it brought them just above that level, so instead of being resistance as expected, it became intraday support.

Typically a gap such as this will begin to close within the first 15 minute of the day, and if it does not and ends up holding during that time, then the odds are higher that a trend day in the direction of the gap will occur. On Friday the market defied the odds. It began to close within the first 15 minutes, but the pace of the selling was moderate and there was a great deal of overlap from one bar to the next on a 5 minute time frame.

The market popped when the 10:15 ET correction period hit, breaking the trend from the pullback with more strength than the overall downtrend. A bit of congestion followed as the momentum continued to roll over. By 10:45 ET the market was already coming back into the morning highs. The pace of the buying accelerated and this supported an uptrend bias into the early afternoon.

Since the market had plenty of room to move before hitting an equal move compared to the rally which took place into mid-day on Wednesday, it was easy for the trend to continue throughout the morning, although the buying was rather choppy overall. At 12:30 ET the indices were hitting that equal move level, which, given the 60 minute time frame, was very strong resistance. They began to turn over off highs, but the 13:00 ET correction period held as the indices hit their 5 minute 20 period simple moving averages for support and slightly higher highs were hit into 13:30 ET before the market finally reversed course into the second half of the afternoon.

Although the selling was still on the choppy side, the 5 minute 20 sma served as resistance throughout the move lower and the market experienced several strong, albeit short-lived, bouts of selling. The morning pivots on a 5 minute time frame served as support, stalling the move from time to time throughout the afternoon downtrend. The indices did pop slightly into the close with traders covering positions ahead of the weekend, but turned lower again at the bell.

The Dow Jones Industrial Average ($DJI) closer higher by 1.8% on Friday with a gain of 228.87 points, ending the session at 12,849. On the week as a whole, the Dow climbed 4.3%. The S&P 500 ($SPX) rose 1.8% as well on Friday, amounting a gain of 24 points on the day. It closed at 1,390 and also advanced 4.3% on the week. The Nasdaq Composite ($COMPX) posted the strongest performance on Friday, adding 2.6%, or 61 points, to close at 2,402. This resulted in a 4.9% gain for the week. Gainers outpaced decliners by 4 to 1 on the New York Stock Exchange and 3 to 1 on the Nasdaq on Friday, although overall market volume was typical to that of recent sessions with 1.5 billion shares exchanged on the NYSE and 989 million on the Nasdaq.

The market still offers the potential that another reversal off highs on a daily and weekly time frame may be forthcoming. Although speculation abounds that the economic slowdown may be short-lived and that things are not as bad as feared, it would not take a lot for the market to again drop sharply and continue lower in the summer or early fall. I would expect the Nasdaq to suffer the least compared to the S&P 500 and Dow Jones Ind. Average in terms of the extent of retracement back into the lows of the year thus far. The S&Ps and Dow will be more likely to hit new yearly lows should this occur, whereas the Nasdaq would more likely find support in the congestion from March initially.

Since trading over this next week will be greatly impacted by earnings, I'll be taking things a day at a time based upon how the market begins each session instead of relying as heavily on my evening analysis. That said, however, the market has had two waves of buying on a 60 minute time frame since the 15th and has room for a third, but I do not expect similar momentum and the market can easily begin to shift pace at highs once again to pullback into the latter half of the week. The 20 day sma will once again be support, but the next time it hits it will be more likely to congest along it and can more easily break through it if the market turns over following slightly higher highs on the 60 minute charts, as opposed to if it holds Friday's highs and then chops lower from that point.

Dow Jones Industrial Average ($DJI)



S&P 500 ($SPX)



Nasdaq Composite ($COMPX)

Economic Reports and Earnings Events This Week

Economic Reports and Events This Week

Monday, April 21, 2008
There are no economic indicators scheduled for today

Tuesday, April 22, 2008
7:45a.m. ICSC Chain Store Sales Index.
8:55a.m. Redbook Retail Sales Index.
10:00a.m. Apr Richmond Fed Manufacturing Index. Previous: 6.
5:00a.m. ABC/Wash Post Consumer Conf.

Wednesday, April 23, 2008
10:00a.m. Mar Existing Home Sales. Previous: +2.9%.

Thursday, April 24, 2008
8:30a.m. Initial Jobless Claims.
8:30a.m. Mar Durable Goods Orders. Previous: -1.1%.
10:00a.m. DJ-BTMU Business Barometer.
10:00a.m. Mar Help-Wanted Index. Previous: 21.
10:00a.m. Mar New Home Sales. Previous: -1.8%.

Friday, April 25, 2008
10:00a.m. End-Apr Reuters/U Mich Sentiment Index.



Key Earnings Announcements This Week:

Monday, April 21, 2008
Before: ALDN, AME, AMLN, ACI, BAC, BOH, CNB, CORS, LL, GCI, HAL, HBI, HAS, LEE, MAT, MRK, NTY, NVS, QXM, DGX, SAY, TNB, WFT
After: ALB, AXP, BSX, CR, DAC, DST, EFX, ETH, RE, FDG, FWRD, HPC, HXL, JEC, KRC, LNCR, LOGI, MSPD, NBR, NFLX, NVLS, OMCL, OMI, PKG, PTP, PLXT, RGA, SLG, SFG, STLD, TXN, USNA, VRTX, VNUS, VLTR, WCN, WGOV, ZRAN

Tuesday, April 22, 2008
Before: AKS, AXE, ARB, ASTE, T, AUO, ALV, AVY, BHI, BKRS, BMS, BJS, EAT, CP, CSL, CE, CNC, CME, COH, CPO, CFC, DD, ECA, EEFT, FITB, FMER, GNTX, HSC, HBAN, IEX, IIVI, JEF, JBLU, JRN, KELYA, KMB, KCI, KVHI, LAB, LXK, LMT, MCD, MDP, MICC, NCC, NOC, NS, OMC, OXPS, PCAR, PH, BTU, PNR, PAS, RYN, ROH, SSW, SHW, SII, SNA, STI, TCB, TLAB, UAUA, UNH, USG, WDR, WAT, WU, WHR, WTNY, WYE, XTO
After: RNT, AMSG, ANAD, ANEN, BRCM, CHRW, BCR, CDNS, CLMS, CLZR, CRI, CERN, CVTI, CREE, CSGS, CYMI, EGLT, EGP, EW, WIRE, ENTU, FCFS, FBC, FULT, HBHC, HGIC, IBKC, INFN, IVGN, LDSH, LDIS, MANH, MOLX, NARA, NETL, NSC, NUVA, ODFL, ONNN, ORLY, PXLW, PPDI, RJF, RCRC, RHI, SEAB, SMTL, SIAL, SIMG, SWKS, SSCC, TCO, TER, TRMK, TUP, VFC, VMW, VOCS, XL, YHOO, YUM, ZHNE

Wednesday, April 23, 2008
Before: AMG, APF, ATI, ABK, ABC, ABFS, ARW, ASH, ATMI, BDX, BHP, BIIB, BA, CEG, CFR, CYBI, DAL, DOV, EMC, FCL, FCX, GD, GENZ, GSK, GRP, HMA, JAH, LII, LVLT, LECO, LPX, MPX, MNI, MNC, MCO, MWRK, NWA, NYB, PMTC, PFCB, PNW, PX, PDS, RGS, RIMG, ROK, RES, R, SGP, SRP, SLGN, SPNC, TROW, TDY, TRA, MDCO, UGI, UPS, WLP
During: BUD, EGN
After: AEIS, AFL, ACL, ALL, AMZN, ECOL, AGP, AAPL, ARNA, AXYS, BEZ, BBSI, BRO, BLDR, CLDN, CHIC, CMH, CTXS, CNS, CVGI, CLB, CSGP, CVA, EFII, EPIC, EQIX, FFIV, DAVE, FNF, FADV, FMC, GDI, GGG, GSIC, HLIT, HTZ, HRH, ICO, KEX, LHO, LSI, MTSN, MCGC, MRCY, MEOH, MOBE, MGI, MTSC, NFX, NINE, NE, NTRI, PTV, PRXL, PNSN, PLXS, PHM, QCOM, STR, QDEL, RADN, RMBS, RJET, RSG, RYL, SANM, SCSS, SKX, SOV, STMP, SRDX, TEX, TSCO, TQNT, UB, VARI, VAR, WOOF, VIGN, XLNX

Thursday, April 24, 2008
Before: FLWS, MMM, ABH, AET, AAI, ALK, MO, AEP, AIT, ARTG, ABG, AACC, AZN, AGIX, AN, AVT, AVX, BLL, BDC, BHE, BDK, BMY, BC, BW, BBW, BG, CCMP, CRR, CSH, CRA, CPS, CBR, CNH, CXG, CCE, CNMD, COP, CNX, CBE, DLX, DO, DTG, DDE, DVD, DOW, DEP, ELNK, ELON, ECL, ELN, EME, EDV, EPD, SSP, EXC, EXR, FLIR, FRPT, F, FO, BEN, GMT, GR, HSY, HUB.B, ICTG, IKN, IMN, IMCL, IPCC, IDC, IVZ, ESI, JAKK, JNS, KDN, KSU, KBW, KEI, KMT, KLIC, FSTR, LLL, LH, LTM, LIFC, LYTS, HZO, MDC, MEDE, MLNM, MKSI, MOT, MPS, MWIV, NAFC, NWL, NEM, NOHD, NJR, NCX, OXY, ODP, ORI, OHI, OVRL, OSTK, PTC, PTI, PCCC, PENN, PPCO, PEP, PLUG, POT, PCH, PLD, QLTI, QUIX, RHD, RDN, RTN, FRZ, RGC, RAI, COL, SWY, SCG, POOL, SEIC, SMI, SEPR, SHPGY, SI, SPAR, SPR, SWK, HOT, STFC, SSYS, SU, SY, SNV, SYNT, SYPR, TASR, TNC, TEN, SNAK, TMO, TSCM, TRAD, TRV, UNP, USAP, LCC, UST, VDSI, WAB, WCG, WCC, WMAR, WST, WRLD, XMSR, ZMH, ZOLL
During: AIMC, BPL
After: ABAX, AFFX, AYE, AMX, AFG, ACF, AMGN, ARBA, ARTC, AJG, ASIA, AVID, BIDU, BKUNA, BIDZ, BJRI, EPAY, BTUI, BUCY, BLG, CLS, CENX, CF, CTHR, CHRT, CAKE, CHE, CB, CCU, CCO, CNET, COBZ, COHR, COHU, COLM, CTV, EXBD, DVW, CW, DDUP, DCT, DECK, DFG, DV, DSCM, DDR, DXPE, BOOM, EMN, ESIO, ELX, EPIQ, EXAR, EQPW, FALC, FIS, FR, FMD, FDRY, GNW, ROCK, HITT, HME, HUBG, IKAN, INSP, IM, INSU, IDTI, ISSI, IBKR, IOM, IRBT, ISTA, XXIA, JJSF, JNPR, KLAC, KNX, LFL, LSCC, MEE, MFE, WFR, MMSI, MTD, MCRL, MSCC, MSFT, MTX, MCRI, MRT, NLS, NCI, NTGR, N, OPWV, OPLK, OSIP, OSG, PKTR, PCTI, PKI, PFWD, PRAA, POWI, PWER, RACK, RMTR, RRC, RVBD, ROP, RRR, WINS, SVVS, SCSC, SCRX, CHK, SIGI, SIMO, SIRF, PCU, SPF, STNR, SRCL, SWN, SYNA, TNL, TZOO, TRMB, TYL, GROW, UHS, VSEA, VVUS, VLCM, WRB, WDC, WGL, WLL, WSH, GB, WMGI, ZIGO

Friday, April 25, 2008
Before: ACPW, AXL, CSUN, SUR, CCUR, CVH, CVTX, ETR, GT, IDXX, ITT, LNCE, ERIC, MBFI, NNI, OPTR, SAIA, VVI, WEN
After: ABMD, BFAM, DHOM, ENTR

Note: All economic numbers and earnings reports are in lines with those compiled by Briefing.com. Occasionally changes will occur that are made after the posting of this column. This list is not a complete list of earnings, so always double check your positions!

Trade Wrapup - 20080418

09:36 Toni - This gap took The ES just above the highs on the 7th Same for the NQ sitting intraday on top of those highs but still in that resistance zone

09:38 Toni - HON on upside watch list due to favorable daily chart today

09:39 norancho - EQIX similar to HON

09:41 Toni - MHK also favorable for upside today to watch for cont. patterns

09:41 Toni - nasdaq gainers:
09:41 Toni - Symbol
09:41 Toni - AAPL
09:41 Toni - GOOG
09:41 Toni - RIMM
09:41 Toni - AMZN
09:41 Toni - BIDU
09:41 Toni - ZION
09:41 Toni - PCAR
09:41 Toni - WYNN
09:41 Toni - EXPD
09:41 Toni - DRYS
09:41 Toni - FISV
09:41 Toni - OSTK
09:41 Toni - FWLT
09:41 Toni - TROW
09:41 Toni - SHLD
09:41 Toni - JOYG
09:41 Toni - BMRN
09:41 Toni - MELI

09:43 Toni - WYNN is on my long watch list

09:46 Toni - Note: This gap did not hold up in the first 15 min of the day... created higher odds it will not hold up well
09:46 Toni - does have first support in here

09:46 Toni - nyse losers:
09:46 Toni - Symbol
09:46 Toni - ABX
09:46 Toni - FCX
09:46 Toni - POT
09:46 Toni - GG
09:46 Toni - NEM
09:46 Toni - KGC
09:46 Toni - PBR
09:46 Toni - X
09:46 Toni - MOS
09:46 Toni - AEM
09:46 Toni - BHP
09:46 Toni - VAR
09:46 Toni - PBR.A
09:46 Toni - PDE
09:46 Toni - CNQ
09:46 Toni - IVN
09:46 Toni - ATN

09:53 Toni - GS base at highs

10:29 Toni - FWLT cup with handle 2 min
10:43 Toni - just under morning highs is initial target on FWLT
10:44 Toni - coming into that target zone now

10:47 Toni - futures here at morning high resistance

12:06 Toni - 12884 is next YM resistnace zone

12:34 Toni - futures resistance zone
12:39 Toni - caution on new long positions at this time

14:02 Toni - the majority of the market gainers look done

Market Experiences Another Day of Mixed Trading

Good day! The market struggled to find a strong directional fit on Thursday following mixed earnings from top names such as International Business Machs. (IBM), Ebay Inc. (EBAY), and Altera Corp. (ALTR). These three had announced earnings after the close on Wednesday and were followed by large upside gaps in IBM and ALTR and a strong downside gap in EBAY. Nokia Corp. (NOK) and Merrill Lynch (MER) both announced ahead of Thursday's open. NOK was severely beaten, while MER managed to recover from a slight downside gap.

After heading sharply higher Wednesday in afterhours trade, the index futures slowly, but steadily, reclaimed most of the gains during the premarket hours. The premarket economic data had very little impact, but were not helpful in providing a further upside boost. Jobless claims rose 17,000 last week to hit 372,000. This was pretty much in line with expectations.

When the session began, the Nasdaq 100 EMinis (futures symbol NQ) were in positive territory by a hair, while the S&P 500 EMini (ES) and Dow Jones Industrial Average (YM) was slightly negative. Not a lot of action took place within the first 15 minutes of trade, but all three indices did close their gaps during that time and then fell quickly lower for several minutes at 10:00 ET. This two-wave pullback on the 5 minute time frame created a buy setup into 10:15 ET.

Although the Nasdaq had the stronger open, the S&Ps and Dow took over coming off the early morning lows. Both indices pushed quickly into the prior afternoon's intraday highs, breaking them by a hair and then retesting them a second time about 15-20 minutes later. This rapid retest created a 2T pattern on both the 5 minute and 2 minute time frames, resulting in a trap for the bulls that allowed the market to pull back throughout the remainder of the morning.

The Nasdaq suffered the most on the late morning correction. Although it found support initially at the morning lows around 11:00 ET, a small continuation pattern formed in the indices into 11:15 ET and was followed by another wave of selling into 11:40/12:00. The S&Ps and Dow both came into support at the morning lows at that point, but the Nasdaq was already back to where the morning momentum had slowed the previous day and had even fallen through Wednesday's afternoon lows.

As noon hit, the momentum slowed on the downside. This is a common reversal period for the market and the indices made an attempt to bounce off it. The momentum had not rolled over quite well enough to break the 5 minute 20 period simple moving average, however, and a second test of the lows took place into 12:30 ET. This time the indices had slid down the 5 minute 20 sma and the retest of lows created a stronger reversal pattern into the early afternoon.

While the stronger Dow found support at morning lows at the 15 minute 20 sma, this same moving average acted as resistance for the Nasdaq on its early afternoon rally. It hit at the same time as the 13:00 ET correction period and pushed the Nasdaq into a trading range. The S&Ps and Dow were able to still continue higher without worrying about resistance other than the morning highs. This resistance zone hit shortly before the 14:00 ET correction period, although the indices did not quite test the exact highs. The Nasdaq had begun hugging its 5 minute 20 sma at that time and it fell apart at the same time as selling hit in the other two indices.

This second pullback on the afternoon lasted until about 14:10 ET. The mid-day congestion zone served as support and the market bounced quickly back to the early afternoon highs. Since this created a "V" formation on the 5 minute time frame, those highs again served as resistance, creating another smaller pullback into the 15:00 ET correction period. After being held back all day, the Nasdaq really owned this afternoon breakout. It spiked to hit a move equal to that which had taken place into 13:00 ET, but it didn't stop there.

While the S&Ps and Dow stepped to new highs on small 1 minute bull flags, the Nasdaq based and then broke higher just before the close in the final 15 minutes of trade. It returned to opening price levels. Although not as impressive overall compared to the S&Ps and Dow which made higher highs in the afternoon, this was quite an accomplishment given how much farther it had to move in order to even come close to hitting earlier highs. Unfortunately, the stair-stepping was an issue for the S&P and Dow because it opened the door for a rapid, as opposed to gradual, correction into the close. This made it difficult for any of the indices to hold onto their late day gains.

The S&Ps and Dow closed relatively unchanged on Thursday, while the Nasdaq posted small losses. The S&P 500 ($SPX) ended the day higher by a fraction of a point, up 0.85. It closed at 1,365.56. The Dow Jones Industrial Average ($DJI) gained 1.22 points. It closed at 12620.49. The Nasdaq Composite ($COMPX) lost 8.28 points. It closed at 2,341.83.

Leaders in the Dow included Citigroup (C) (+2.52%), American Express (AXP) (+2.17%), and IBM (+2.17%). Top losers were Pfizer (PFE) (-3.32%), Merck & Co (MRK) (-2.70%), United Technologies (UTX) (-2.53), and Procter & Gamble (PG) (-2.47%). In the Nasdaq, standouts included Altera Corp. (ALTR) (+8.65%) and Level 3 Comm. (LVLT) (+5.16%) on the positive side and Ericsson L M Tel. Co. (ERIC) (-4.5%), Wynn Resorts (WYNN) (-4.06%), Gilead Sciences (GILD) (-3.55%), and EBAY (-3.46%) on the negative side. Additionally, Merrill Lynch (MER) closed higher by 4.4%.

Google (GOOG) announced earnings just after the market close on Thursday and sent the index futures sharply higher. The company says that its first-quarter profit climbed 30% with net income up $4.12/share, surpassing analyst expectations. Its revenue rose 42% in the past year. GOOG itself was trading higher by more than 10% in after-hours trade.

This news alone can easily create continued upside in the market as a whole into Friday morning to help take the indices back to those highs from the 7th that I had mentioned yesterday as resistance. Thursday's highs were price resistance from the 10th. It was a gap closure level in the Nasdaq and highs for the S&Ps and Dow. The NQ went on to hit those highs itself within 15 minutes of the close on GOOG's news. I am a bit leery that the S&Ps and Dow stair-stepped into this level after Wednesday's gap, so while I'm bullish for opening action, I am pretty open as to what the intraday trade with bring and do not have a huge bias for intraday trading on Friday.


Dow Jones Industrial Average ($DJI)



S&P 500 ($SPX)



Nasdaq Composite ($COMPX)

Trade Wrapup - 20080417

Trade Wrapup - Thursday, April 17, 2008

09:28
gapping lower:
EBAY
SPWR
ISIL
PLCM
ERIC
TTWO
EPIC
JASO
FSLR
BIDU
RIMM
GILD
GOOG
GOLD
AMZN
SMSC
QCOM
VIVO
STLD
AAUK
JBHT

gapping higher:
SYMC
FUQI
CHKP
AVAN
AVCT
ALTR
DELL
TEVA
CRNT
PHTN
MICC
TRIN
RYAAY
DROOY
XLNX
NTRS
ZION
CPHD

09:29 market is loking to open slightly lower it is hitting support in the premarket rounding off a bit at premarket lows hthere is some smealler time framer resistance here at 5 min 20 sma all sessions charts frame

09:39 market is still melting down quite a bit
i am looking for some back and forth type of action overall so i want to see how the market reacts to support levels
the nasdaq is the one really having trouble
the ES ans Dow are actually still holding up

09:53 - SMSC basing at lows
10:09 - SMSC off watch

10:09 - ES hit 15 min 20 sma support

11:20 -Eternum- Toni, does it look like futs are making avalanche on 5 min?
11:21 - Toni - ES and YM can if they contonue to congest here... would be the very start of the base for one
Avalanche: For more information on this setup, please see http://www.tradingfrommainstreet.com/techanalysis.html#4

Market Soars on Heels of INTC and JPM News

Good day! The market once again experienced an extreme gap on Wednesday. As on Tuesday, the gap was to the upside. The index futures had popped sharply following Tuesday's close. Intel Corp. (INTC) had announced that it expected revenue to beat analyst expectations and predicted a 56% gross margin for the second quarter. J.P. Morgan (JPM) also provided a boost for the bulls. The first-quarter profit cut that had been anticipated ended up being less than analysts had predicted.

I underestimated the impact of the INTL news when I wrote last evening's column, but the market has some fairly stringent guidelines for gaps such as this. If it starts to close within the first 15 minute of the day, then it will typically fill within the first couple of hours. If it holds, such as bases or pulls higher, then the gap will have significantly lower odds of closing and trend days in the direction of the gap become more likely. Since this particular gap was also off that 60 minute support zone we had been looking at over the past couple of days, it made it even easier for the market to hold up once the initial opening trade action had passed.

After slight upside at the open, the market headed a little higher after the first 15 minutes, but then fell into a trading range along the highs for half an hour. The 10:15 ET correction period held and the indices broke sharply to new intraday highs. This was the strongest move of the session, but the momentum slowed between 10:30 and 11:00 ET. The 11:00 ET correction period held in the S&P 500 ($SPX) and Dow Jones Industrial Average ($DJI), but the Nasdaq Composite ($COMPX) continued to push to new highs intraday.

From 11:00 to 12:00 ET, the S&P 500 and Dow corrected by falling quickly off highs for several minutes and then hugged support, creating a small 5 minute Avalanche pattern into noon. This resulted in a two-wave pullback for a continuation buy setup in the to the early afternoon. The market again moved to new highs, albeit barely, into 12:30 ET before falling into a larger correction throughout the rest of the first half of the afternoon.

Market volume was high on Wednesday, but it declined somewhat as the indices pulled back, forming a series of tiny bear flags into 14:30 ET. The gentle pace and the lighter volume, in addition to the 15 minute 20 period simple moving average support created the high probability that the market would hold its bias and remain bullish into the close. The indices formed a small congestion after breaking the gradual downtrend along the 5 minute 20 sma. This broke at 15:00 ET, first leading the market to a retest of the afternoon highs and then pushing through them. The S&Ps took over the lead, while the Nasdaq faltered somewhat in the final 30 minutes of trade. All three indices, however, closed near the intraday highs and the index futures busted through those levels following the closing bell.

The Dow gained 256.80 points on Wednesday, or 2.1%. It closed at 12,619 with 28 of its 30 components in positive territory. The S&P 500 rose 30.28 points, or 2.3%, and closed at 1,364. The Nasdaq Composite advanced 64.07 points, or 2.8% and closed at 2,350. The Russell 200 outpaced them all, rising 21.33 points, or 3.08%, to close at 713.21. I am expecting the market to continue to push higher in Thursday's session with the highs from the 7th serving as strong resistance. If the market moves higher in the morning, however, it will have a difficult time continuing into the afternoon, so a correction on a 30 minute time frame would then be something to look out for. If it opens relatively unchanged, pulling back again in premarket trading, then it can congest throughout the morning and break higher into the afternoon.


Dow Jones Industrial Average ($DJI)



S&P 500 ($SPX)



Nasdaq Composite ($COMPX)