Things will be cooling down a little heading into the Christmas break, but Friday offered bears a huge boost with significant distribution and technical reversals.  Few indices escaped the selling. The Nasdaq lost rising support, and undercut its 200-day MA in a ,move to set to challenge the swing lows of November and December. The 4,900 level is a critical level for the trading range as a loss of this would open up for a retest of the August/October swing lows.

It was set up for bears to challenge with markets running close to moving average resistance, but in the end, bulls were able to push a break and pressure shorts. Volume wasn't great, but it's a start. The S&P closed above converging moving averages of the 20-day, 50-day and 200-day. There was a 'buy' trigger in On-Balance-Volume too. The index also stretched its relative advantage against the Russell 2000.

After an extended period of under performance for the Russell 2000, today saw it gain over a percentage point and close near the day's high. It's a positive response to the test of former channel resistance turned support, but it will have to watch supply as it approaches the moving averages.

The early selling wasn't able to force prices lower and bulls were able to stage a recovery by lunch time which accelerated into the close. Large Caps and Tech are well placed for a rally in the near term, but the Russell 2000 didn't make the cut. When the S&P gets back to (converging) 50-day and 200-day MAs it will find itself up against supply generated by these key moving averages.  However, there is room for upside before then.

The Russell 2000 took a big hit on Friday, generating a loss of over 2% as the index stayed within the 85% percentile of weak prices going back to 1987. This is a five month stretch of underperformance for this index and is an opportunity for buy-and-holders to accumulate Small Cap shares. From a trade perspective, the Russell 2000 is down at former declining channel resistance and potential support.

Bulls needed to do more after a decent start petered out by the close of business. While markets did finish higher, they did so only on modest volume. The Nasdaq had its 'Golden Cross', but it didn't see a test of this moving average cross. Given the weak finish, the test could occur tomorrow.

Today's action was more decisive towards bears, with volume rising in confirmed distribution. The Russell effectively confirmed the trendline break and now looking at the 1,140 swing low which marks support of its trading range.  Should this be lost, then next step is a move towards 1,080. Technicals are all aligned in bears favour.

It will rank as another distribution day for markets, but despite a second day of selling bears were unable to erase Friday's big bullish bonanza for Large Cap and Tech indices. The only index to suggest bears are gaining some form of control is the Russell 2000. Today saw the trendline connecting September and November swing lows broken to the downside.  This has come with a sharp drop in relative performance against the aforementioned indices.

It's scrappy, but today was the turn of bears to attack Friday's gains. Not much to offer other than scalping day trades in this kind of market.  The index to suffer most was the Russell 2000. It lost over 1.5% as it reversed all of Friday's gain and then some. The index is close to a breach of the rising trendline, but did enough to finish on its 50-day MA. Action suggests bulls will try tomorrow. The S&P experienced modest selling volume. Not enough to rank as distribution, and not enough downside to break the 200-day MA as support. Technicals are still negative, apart from a strong relative performance gain against struggling Small Caps. The Nasdaq registered a distribution day, as today's selling returned On-Balance-Volume to a 'sell' trigger for the indicator. Other technicals remain weak. The price loss wasn't great, and the 20-day MA still plays as support, but bulls wouldn't have to do much to break the recent double top. Tomor...

Just when bears look ready to squeeze, along come bulls to bid the market higher. The jobs report had an initial muted reaction, but bulls were able to push the failure of bears to capitalize on the figures to force them into covering. The only disappointment was the volume.  For a big news day, the lack of volume may come back to hunt bulls, but a new (higher) swing low is in play. The S&P will be looking to challenge 2,104. Technicals are with bears, with a 'sell' trigger in the MACD still in play, and On-Balance-Volume in distribution mode since the first November peak.  The index also regained its relative momentum against Small Caps.

Santa was delivered a bit of a shock when sellers took yesterday's declines and added to them. Losses were substantial  - considering recent tight action - and came with confirmed distribution. The S&P came back to its 50-day MA, which may offer bulls a chance to develop a higher swing low. However, further declines which break 2,019 will open up the play for a lower high, lower low and a new downward trend. So tomorrow will need buyers to step up off the open if Santa isn't to disappoint.

It may amount to just a pause in the 'Santa Rally', but today's higher volume selling reversed most (all in some cases) of yesterday's gains and left indices in a bit of a limbo. The November rally remains intact, and the proximity of resistance probably made it easier for sellers to turn the screw. What would be worrying is if today's losses were to intensify as it would open up for another test of the August-September lows. It should be noted, the October low was a significant market breadth low and it won't be breached easily. The S&P lost its 20-day MA and is just above a flat-lined 200-day MA. I would see a defense of the 'bear trap' as a more important test, assisted by the fast rising 50-day MA.

Yesterday's modest losses were undone by today's swoop by buyers. This will have forced many shorts to cover, particularly those who decided to take advantage of yesterday's weakness.  The seasonally positive 'Santa rally' may be perfectly timed here if the November high can be taken out. The S&P reversed the move lower after it failed to crack support of the tight range. Bulls look to be making a better fist of this, and there is a good chance for some follow through higher. On the negative side, the index's relative performance remains a problem as it sharply underperforms against both Tech and Small Cap Indices. It also have negative technicals in the form of On-Balance-Volume and MACD, although the latter is just shy of a 'strong buy' signal.