It was not particularly pretty but it was effective. There was no further drive lower but traders were happy to step in to defend moving averages; those who made the leap were rewarded with an attractive risk:reward opportunity.

Yesterday's respite didn't lead to a bounce, instead, sellers took another swipe at the markets. The worst performer was the Semiconductor Index as it gave up near 2.5% on the day. Today's selling undercut the trendline and finished on its 200-day MA. Technicals are all net bearish but with intermediate stochastics not oversold there is still an opportunity for further losses. Relative performance also expanded on its losses.  The 200-day MA may offer enough traction for a bounce, although given the nature of the sell-off some 'oversell' can be expected.                                                                                                                                                                 

It was worse than expected day for Semiconductors as a sizable gap down and run close to the 200-day MA drove it through many potential support levels. Shorts will be looking to attack the next bounce with a close of today's morning gap the first short entry opportunity (for those who didn't take the 'tweezer top' short).

There was no real change on the end-of-week position of markets. The Semiconductor Index was the most active with an undercut close of the week's swing low Next support level is the 50-day MA.

Yesterday, Small Caps led the rally as Large Caps lost ground. Today, those same weak Large Caps took another hit and dragged Tech indices with them.  Small Caps also suffered but they have plenty of wiggle room before they hit trouble. The Dow sell-off didn't stop at its 50-day MA and is now on course to test its 200-day MA. Technicals, aside from Stochastics, are bearish.

Good news for momentum traders as the Russell 2000 continued its good run. The Russell 200 will start to get hot when it gets into the 15% profit take zone at 1,732 - a zone last seen tested in December 2016; if we are looking at February 2011 levels (the 5% historic zone) then the Russell 2000 would be tagging 1,813. Start taking profits, or sell covered calls, when we get into these levels.

It's looking a little early for some of the nascent pullbacks but buyers are stepping in here to support markets. Much of this looks to be driven by the secular bull market leader, Russell 2000. It managed a new closing high as momentum traders continue to benefit from strength in this index.

Bulls have done a good job of clawing back the losses generated by the individual days of selling which have peppered the market since April's lows. The S&P had reversed from the point of the March high in what looked to be a good shorting opportunity but the lack of follow-through leaves this play vulnerable to a swift exit. A short-stop at 2,792 is the best protective play but further highs are looking more likely.

Another day, another day of gains. Nothing significant but enough to keep rallies and recent breakouts intact. There are few trading opportunities - except to hold on to existing positions. The S&P has a potential shorting opportunity at March swing high resistance but given the breakouts in Tech and Small Caps, I'm not entirely convinced by it. Technicals are net bullish except for relative performance which has been in decline since March.

Markets feeling the pressure of Thursday''s selling recovered to maintain recent breakouts. For example, the Nasdaq 100 made it back to breakout support after briefly undercutting this level on Thursday. Technicals are all bullish and the index remains well placed for further gains.

Since my last update markets continued to edge higher. As of Wednesday's close the Nasdaq 100 was the latest index to break to new all-time highs. Relative performance for the Nasdaq 100 edged a little ahead of the Russell 2000.

Thursday's selling, despite the heavier volume, couldn't undo the underlying demand kick-started by Wednesday's Russell 2000 breakout. The cleanest breakout was in the Semiconductor Index. It finished inside the zone defined by the March 'bull trap'. A push to next resistance at 1,465 looks a reasonable target from here.