Bear traps for S&P and Nasdaq?

We had a successful test of support for the Russell 2000 which delivered a low volume bounce with minimal improvement in supporting technicals.

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Support break for Nasdaq and S&P

Indices have gone from new high breakouts, to 20-day MA tests, to breaks of trendline support - weakening at each step along way.

The Nasdaq finished Friday with a loss of the 50-day MA after trendline support gave way on Thursday.  Friday's volume was relatively light, but there was confirmed distribution on Thursday's selling.  Technicals have taken a marked step lower, especially the MACD - although On-Balance-Volume is hanging on to its 'buy' signal. Intermediate stochastics [39,1] just undercut its mid-line, although a rally tomorrow would be enough to see this as the start of support for a secular trend pullback (although such a pattern would take time). 

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Selling Intensifies

Looks like Gamestock Part II has put a scare in the market!  While this stock starts another wild ride, the broader market took a step back. Today's move carries more weight because it marked the first wide intraday day in a while, and was the first real day of selling experienced since September.

For the Nasdaq, this amounted to a support break and a close below its 50-day MA. Volume selling was lighter, but perhaps shareholders aren't as worried as they probably should be...

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Sellers hit Nasdaq and S&P 50-day MAs

Perhaps a degree of complacency has crept into the market? Today's selling brought the Nasdaq and S&P back to successful tests of their 50-day MAs. What was concerning was the general lack of volume on what is typically an important support test for the indices.  Both the S&P and Nasdaq were able to stage successful intraday recoveries, but again, volume should have been more to support it. 

What we need to watch for tomorrow are losses - typically from the open - that push down into today's spike low for the aforementioned indices. Particularly if this selling volume picks up relative to today.  I would think any close below today's finish would indicate that today's lows (or the 50-day MAs.) will act as support for long.  The Nasdaq probably did enough to defend trend support, although technically there was a big uptick in ADX, and the bearish MACD accelerated downwards. 

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