Just as losses were softened by the range bound aspects of lead markets, same go for Friday's gains. The Russell 2000 ($IWM) managed a retest of what was a 'bull flag' with technicals net bearish.

Nasty set of red candlesticks painted the market, but most of these occurred within the context of trading ranges. It will be a question of balance as Materials and Staples make gains, as Technology suffers. Bitcoin has been on to a hiding, but the retest of the capitulation is coming on modest action and lower volume - the kind of trading you want to see for a tradeable bottom. The Russell 2000 ($IWM) took a 2% hit on higher volume distribution, with the 50-day MA coming into range as a support test. A bullish play would be for a tag of $255 support followed by an end-of-day close above the 50-day MA. Technicals show 'sell' triggers for MACD, On-Balance-Volume and +DI/-DI. Things only get bearish if $255 support is lost. More of a worry is the equal weighted S&P; early gains were quickly reversed, leaving a nasty spike that has a toppy look to it. Technicals are still positive and the 20-day MA has playes as support swing the swing low in November. I think a ...

The S&P and Nasdaq have stalled rallies that haven't yet challenged resistance of their respective trading ranges. There is a case the Nasdaq has come up against resistance, that was once support, of the prior bullish ascending triangle. This level is also near converged 20-day and 50-day MAs. It could be a shorting opportunity with a move to trading range support.

With the tech sell-off clouding action in the S&P and Nasdaq we have to look elsewhere for positivity. And there is no lack of alternatives. The equal weighted S&P kicked on from its 'bull flag' breakout, posting a new high, and is well away from key support of 7,800 - meaning it has room for maneuver should tech weakness expand.

A good start to the week has left indices nicely positioned to kick on with volume rising in accumulation. Best of this is probably the S&P. Today' buying left it on the cusp of a breakout, although it wasn't enough to reverse the 'sell' triggers in On-Balance-Volume and +DI/-DI. However, a breakout would likely turn these technicals net bullish once again.

Aside from Bitcoin, we are not seeing too much technical damage, but we are seeing a pick up in the volume of seeling. Moving averages will be key in the near term before we have to start looking at horizontal price support and swing lows. The Russell 2000 ($IWM) undercut its 20-day MA, but hasn't yet challenged support defined by the December swing high. The MACD is on a 'sell' trigger and +DI/DI and On-Balance-Volume will likely do the same Monday if selling continues. Friday's selling registered as confirmed distribution, which is a worry for Monday. It's the strongest index, but if this falls under $257 we would likely be looking at a new trading range bound by $245 and $270 that could last a number of months.