The S&P lost over 2%, knocking out 2,045 support and returning all technicals into the red. Volume climbed as distribution. The 200-day MA is now the line on the sand for bulls. The loss is significant and will not be easily recovered.
The Nasdaq fell back to its 200-day MA. It finished close enough to this moving average to suggest bulls will mount a defense here first. Other indices may not be so lucky.
The Nasdaq 100 finished bang on the 200-day MA, so buyers may find some joy for a quick intraday rebound tomorrow. Certainly, it's the best placed of today's finishers.
What's not looking so healthy is the Semiconductor Index. It has dropped out of its bullish wedge and is in panic sell mode. Long term investors may seek value in this sector, but trying to pick a bottom is not something likely to bring success.
Of the lead indices, the Russell 2000 suffered the biggest loss on the day. Today's finish left it a long way from its 200-day MA. Small Caps are leading the charge down and it's hard to see bulls getting it back in any meaningful way anytime soon. A break of declining resistance is the minimum to reverse the rot.
For tomorrow, short term traders will probably look to trade a bounce, but they are unlikely to hold over the weekend.
You've now read my opinion, next read Douglas' and Jani's.
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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com, and Product Development Manager for ActivateClients.com. I do a weekly broadcast on Friday's at 13:30 GMT for Tradercast, covering indices, FX and gold, silver and oil - all are welcome! You can read what others are saying about Zignals on Investimonials.com.
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