Yesterday's action was dominated by price. Today it was the turn of volume. Not only was volume higher, but there were additional technical confirmation signals. In the NASDAQ, the MACD trigger line switched to a 'sell' signal, as slow stochastics crossed below the bullish mid-line. The higher volume selling confirmed the second distribution day over the last four trading days. The NASDAQ 100 was more fortunate in its small, bullish hammer, held former declining resistance/support line - but not before it generated a 'sell' signal in its MACD, thus strengthening the bearish divergence in the trigger line. The semiconductor index was able to stall recent declines at 505 and is, in the short term, oversold. For now, look to a bounce to the 20-day MA, but such a move would likely provide only temporary relief.

The Dow avoided the carnage and was able to post modest gains on light volume. The index closed beneath the 20-day MA, but held support of the 50-day MA. The S&P made a higher volume stand at October trendline support, doing so on a bullish hammer - although given the position of slow stochastics at this point, the bullish hammer looks to be a weak reversal signal. The Russell 2000 made a token stand at the 50-day MA, but technical weakness increased.

fallond