While Small Caps typically lead markets, it's currently the S&P doing most of the work. Today's action saw the S&P move towards a test of breakout support without going all the way and doing so. What today did do was confirm there is high volume demand - marked by accumulation - and that buyers appear prepared to defind the 5,670 support level. Technicals are net bullish, another tick in the "defend the breakout" column.

The Russell 2000 had created a resistance break in the move back to the July spike high, but today's loss ended that, opening up the possibility for a double top. Confirmation won't come until there is a loss of $205, and technicals are net bullish. There is also price support in the nearby 20-day and 50-day MAs.

Today's action looked more like a Triple Witch Friday than anything you would expect to see on a Monday. A peak of the news mentioned a Fed rate cut and positive news from Intel , but I was suprised with the level of trading in the S&P and Nasdaq. Last week I had talked about the symmetry in the Russell 2000 ($IWM), but the outcomes have been very different. The reaction we are seeing now in the index, despite the last two day's of losses, is far more positive. The index is holding support of former trend resistance (even if the critical $225 level holds as resistance). Technicals are net positive and selling volume has been well below days of buying. If you were a swing trader, I would say buying at today's close could prove profitable.

The S&P was the index to watch today - it promised much - but in the end, delivered little. The larger picture (weekly charts) still favor bulls, but daily charts are doing their best to suggest otherwise. The index that marked the largest peak reversal was the Russell 2000 ($IWM). There was a clear symmetry in the peak from July and the one from today. And, should the index follow the same path, then a short, sharp drop can be expected. Technicals are net bullish, as they were back then. The best outlook for bulls is if premarket action can eat into the spike high, but if it stays at or near today's close, then when markets open it could turn into an ugly day.

After blasting through 20-day and 50-day moving averages with little fanfare, the S&P, Nasdaq and Russell 2000 ($IWM) all finished with topping doji, opening up the possibility for gaps down tomorrow and bearish "evening star" candlestick formations. The Nasdaq is looking the most bearish of these indices as it stalls out at channel resistance. Its 20-day and 50-day MAs are also nearby, and the tight action of the last few days have left the index clinging on to this moving average support. Technicals are net positive, opening up for a breakout in the downward channel and a challenge of July highs, but price action is key. The closest to new all-time highs is the S&P. Supporting technicals are net bullish and the index has done well to reclaim prior losses. As a reminder, triple tops are rare, so when markets return to resistance (or support) for a third time, then the most likely outcome is a breakout. We will want to see a pick up in volume on such a mov

Today's economic data generated a sizable gap down across indices which carried into the open and for the morning session. At this point, bears had all the momentum until buyers made their appearance and kept buying pressure right into the close. The net result was to leave large bullish candlesticks that offer bulls something to work with for the rest of the week. Starting with the Russell 2000 ($IWM). The bullish 'hammer' occurred at $207.50 support, although the low didn't quite tag the 200-day MA. Technicals are net bearish and the index expanded in its relative underperformance to the Nasdaq and S&P, so we may need to see a retest of today's lows before the challenge of prior highs can commence.

Sellers remorse after a weekend of retrospection might have accounted for some of today's buying, and while bullish haramis left in Indices might offer reversal opportunities, overhead supply at moving averages will likely prove problematic. The Russell 2000 ($IWM) dug in at $207.50 support, established in part by May swing highs. I'm nore sure it's a strong level, particularly as it played little defensive role during the test of the 200-day MA in August. Today's buying was low on volume and didn't change the net technical picture. From a trade perspective, a close (intraday violation okay) of $207 would see a move to the 200-day MA and likely lower.

If a precendent was set by Friday's undercut of the 200-day MA in Semiconductors, then it could be a rough few weeks ahead for indices. The loss of the 200-day MA after such a recent test was not surprising, but given technicals are net bearish and not oversold, then the likelihood of a further support loss of the 4,290 swing low has increased.

The index that had managed to break to new highs last week, the Dow Industrial Average, now finds itself pulling further away from its "Bull Trap" into a test of its 20-day MA. Selling volume was light, but there are new 'sell' triggers in the MACD and +DI/-DI to mark a shift in the August bullish trend. Given current momentum, a test of the 50-day MA looks likely.

So much for the bullish outlook as bears made their presence felt. The biggest loss was in the Semiconductor Index as it lost nearly 8% to close just above it 200-day MA. In addition, the latter index dropped below the stochastic mid-line, having struggled to return above the key divide between bullish and bearish markets.

A solid Friday for indices sets things up nicely for a post-Labor day weekend week. The S&P is the best positioned of the indices, gaining back the ground it lost in the middle part of last week, sitting just below the July swing high. Volume registered as accumulation and technicals are net positive.