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March 8, 2006
 


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MainStreet on Hotcomm

CLICK HERE to learn how you can participate in Toni's upcoming mentoring program, live on Hotcomm! 

Upcoming course dates:
March 20-24, 2006

Disclaimer:  Positions discussed for educational purposes only and past performance is not indicative of future results. Trading in securities or commodities may not be suitable for all individuals.

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       Daily Editorial:
 

Bears Continue to Lead, but Retreat into the Close

Good morning! The market saw a fairly mixed day on Tuesday. After an early attempt to break lower into the open, the indices fell into a longer 15 minute range  Volume declined nicely throughout the morning until shortly after 12:00 ET. At that point the S&P 500 and Nasdaq Composite hit the 15 minute 20 sma resistance and began to sell off mid-day, right in line with our expectations heading into the day. This created a third wave of selling on the 15 minute charts since Friday's highs.
 
http://tradingfrommainstreet.com/images/FocusLetter/20060308nas.gif

This third wave of selling was not as steep as the prior two, but the market still managed to put in a nice downside move for the bears over lunch. Volume was strong on the selling, but it was not as dramatic as the prior day due to the slower pace as compared to Monday afternoon. The decline took the NASDAQ into the lows of several weeks back, while the S&P 500 and Dow Jones Industrial Average found support at the 50 day simple moving average.
http://tradingfrommainstreet.com/images/FocusLetter/20060308sp.gif
The market started to round off after this third drop on the 15 minute charts. Typically, three waves of selling, whereby the correction period between each is comparable, will be followed by a more significant correction than the prior two. This gave me a more bullish bias into the last two to three hours of the day.

After pulling strongly off the 13:10 ET lows, the market came into resistance from the early morning congestion. This led to another attempt at lows, but the lighter volume and more gradual pace lacked the conviction of the prior waves of downside. The Nasdaq made a lower low by only a tick or two, while the S&P 500 held the lows almost perfectly. The Dow held up better still, putting in a slightly higher high around 14:30 ET. These reversal patterns helped support a longer intraday correction off lows as the day wound to a close.

http://tradingfrommainstreet.com/images/FocusLetter/20060308dow.gif

There are a couple of possibilities for what comes next. One is that the market can rest about 1.5 to 2 times the prior two 15 minute corrections, basing for another day or so to create a fourth wave of selling before turning around. I think that the more rounded lows we saw on the 15-30 minute charts will make this a bit more difficult though. A cup with handle on those time frames is also possible. While we have seen a great deal of selling since last week, we still are not hugely oversold. Hence, I am still leery of becoming too heavily invested on the long side on the larger intraday and daily time frames.


UPCOMING MENTORING OPPORTUNITIES:

To further you own knowledge of market activity and technical analysis, you may be interested in participating in one of my upcoming online seminars. Held March 20-24, I will be utilizing the Hotcomm platform which will allow participants the same opportunities as they would attending a class on-site. For more information, click on the journal image at the right hand side of my site at http://www.tonihansen.com or email me directly at toni@tradingfrommainstreet.com. To register CLICK HERE.

When asking those who attended my last class which aspects of my course were most beneficial, their responses were very similar:

"The concepts introduced such as pace and pace within patterns which were new to me and which I HAVEN'T SEEN ANYWHERE ELSE." - Larry
"I found everything in the course to be beneficial... It ranked as the best I have seen. Seriously, cant imagine any course being better. Hotcomm is a virtual chatroom where one can see charts and listen to commentary live!" - Karl
"The whole course covers everything you need to know about being a successful trader.... I have gone from an "unprofitable trader" to being a "PROFITABLE TRADER."  Your course made the difference...." - Jeff
 
 
 
 Economic Reports and Events:

Mar 08: Crude Inventories 03/03 (10:30 am)

Mar 09: Initial Claims 03/04 (8:30 am), Trade Balance for Jan (8:30 am)

Mar 10: Average Workweek for Feb (8:30 am), Hourly Earning for Feb (8:30 am), Nonfarm Payrolls for Feb (8:30 am), Unemployment Rate for Feb (8:30 am), Wholesale Inventories for Jan (10:00 am), Treasury Budget for Feb (14:00 pm)

Mar 13: -

Mar 14: Current Account for Q4 (8:30 am), Retail Sales for Feb (8:30 am), Retail Sales ex-auto for Feb (8:30 am), Business Inventories for Jan (10:00 am)
 
   Earnings Announcements of Interest:
 
Only stocks with an average daily volume of 500K+ are listed. List may not be complete so be sure to always check your stock's earnings date before holding a position overnight. (A) = Earnings after the close, (B) = Earnings before the open, (?) = Earnings time not specified at the time of this writing

Mar 08: AVII (B), CWTR (A), DYN (B), GMST (A), L (?), MIK (A), SFCC (A), PKS (B), TIVO (A), WIND (A)

Mar 09: ARO (A), BBI (B), CTIC (B), CLE (06:00 am ET), FLE (B), GOL (A), GTI (B), HANS (?), TMR (?), NSM (?), ZQK (?), TNE (B), PLCE (?), URBN (06:00 am ET)

Mar 10: ALTI (?), ANN (B)

Mar 13: DNDN (?), IDWK (?), PVX (?), SONS (A)

Mar 14: GS (B), MIR (?), PDE (A), SUG (B)

Note: All economic numbers and earnings reports are in lines with those compiled by Yahoo Finance. Occasionally changes will occur that are made after the posting of this column.
 

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