The index futures shot sharply to the upside on these reports, breaking strongly out of the premarket trading range to trigger a technical buy as well. The rally continued into the 9:45 a.m. ET correction period, but at that point it began to struggle. The Nasdaq was hitting previous daily highs and the Dow was running into resistance at its upper channel levels on the daily time frame. The pace of the buying slowed and by 9:20 ET the market peaked.
The indices corrected slowly to begin with. This was largely due to the rapid pace of the overall rally. When the 5 minute 20 period moving average hit, however, the pace shifted. The indices hugged the moving average on light volume. This created the Avalanche type of pattern I wrote about in Thursday's column. It triggered on the early side coming out of the 10:45 ET correction period, but followed through extremely well into noon. At that point the indices hit the lower end of the daily trading channel and the market once again found support. The indices corrected steadily with two waves of upside off lows into 15:00 ET before heading lower again into the close.