
The alternative is a bear trap; the touch of resistance so near the 50-day MA on overbought stochastics will be too tempting for shorts to ignore. If resistance is breached the Nasdaq could make a rapid gains to 1,600 and for once shorts might be the ones left crying. Technicals are finding some bullish legs, particularly the MACD.
Shorts may be more tempted by the Dow which did show heavier volume selling, stayed below its 50-day MA and made a picture perfect touch of November lows (support turned resistance). The Dow is certainly the dog here, but if you are looking for a broader recovery then the Dow is irrelevant; small caps and tech should be your focus.

Having said that, the Russell 2000 still has to push through its 50-day MA, although technicals are all in the green.

Selling is to be expected, but I suspect it will be shorts who will be caught with their pants down.
Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website