Good day! The market didn't offer up a lot for surprises on Tuesday after Monday's strong reversal. The price action intraday was exactly in line with expectations heading into the session. On Monday we had witnessed sharp selling in the morning with the pace abating as the day wore on. This shift in momentum continued into Tuesday's session as well, creating a lot of back and forth action on the 15-minute time frame and was favorable for day traders as anticipated, but did little to advance the previous day's trend. This type of trade is continuing into Wednesday's session as well.
As I mentioned for yesterday's session, as this congestion on the 15-minute charts continues, the momentum of the smaller price shifts within the congestion will play a large role in the overall direction of the day's action. Right now the indices are rounding off at lows, which is favorable for the bulls, but it's simply too early to tell if this will hold true since more gradual downside within the congestion is still needed for further confirmation.
Dow Jones Industrial Average
The data on Tuesday had little impact upon the day's price action. According to the Commerce Department, factory orders rose by 3% in March, which was higher than the 2.5% analysts had anticipated. The indices were already on the move higher heading into this data and found themselves at resistance as the news settled in. Nevertheless, the corrective move was mild and followed by further upside into noon before turning once again.
Wednesday's reaction to morning data was also mild. The ADP National Employment Index showed that the private sector created 179,000 jobs last month, but this was less than half what had been anticipated. Friday's employment report will be much more widely followed, however, and likely to generate a much stronger reaction. Prior to that, the Labor Department will release last week's jobless claims on Thursday.