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Bulls Were Unable To Build On Morning Optimism

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After the Fed driven sell-off that delivered support breaks for some of the indices there was an attempt by bulls to stage a bounce, but traders weren't able to build on the sizable opening gaps, and some indices drifted lower by the close. The Russell 2000 ($IWM) lost the most ground off the open. However, today's close was enough to regain support, leaving yesterday's action as a potential 'bear trap'. Technicals are net bearish oversold. And today's buying volume was below yesterday's selling (distribution). The S&P finished the day where it started, which is also 20-day MA resistance. Aggressive traders could go with a swing trade as the next move could be sizable (particularly if the move is higher). The Nasdaq is dominated by the trading range, but within that we have a consolidation triangle. As it stands, the index is at resistance of this triangle, and given recent selling volume I would be looking for a move to close today...
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Russell 2000 ($IWM) Rallies Back But Resistance Remains

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It has been a volatile past few days for indices, but the bigger picture remains unchanged. The Russell 2000 ($IWM) has struggled to regain its 200-day MA despite today's big gain. Today's buying registered as accumulation but technicals are still net bearish, and the 20-day MA is on course to cut below its 200-day MA. However, if we see a close above 20-day MA and 200-day MA it will give skew things back in bulls favor (buying subsequent dips). Aggressive players could look to buy any subsequent drop below $272, with a stop on a loss of $270.
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Russell 2000 ($IWM) Fails 200-day MA Test as Semis ($SOX) Target 5.5K

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Troubling times for indices as Thursday's strong bounce was killed by an even larger sell off on confirmed distribution. The Russell 2000 ($IWM) was already oversold when it finished with a bearish engulfing pattern. The May swing low has played as support following the loss of the 200-day MA, but after Friday, it's hard to see that continuing. Looking at a weekly chart for the index, there is a chance the 50-week MA could play as support, but for this to happen we need to see a Friday close at or above this level; if we don't, then $240 becomes next support.
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Russell 2000 Undercuts 200-Day MA Despite Today's Buying

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Buyers step up after yesterday's losses, losses that registered as distribution. Buyers returned on good volume, and in some cases, exceeded the losses of yesterday. But the buying was not necessarily enough to reverse the damage of Wednesday's losses. The Russell 2000 ($IWM) did not survive its third test of its 200-day MA in the space of a couple of weeks. Technicals are now net bearish with a new (strong) MACD 'sell' trigger. Traders need to be careful here. Today's buying (a "two-bar reversal") in an oversold condition should register as a long-trade opportunity, and it may yet still do, but with the psychological break of the 200-day MA it's hard to see this turning into a strong bounce. And we are now in the kind of situation where crashes emerge. We should see a move to the 200-day or even the 20-day MA, but beyond that, it's hard to say.
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S&P Squeeze On Distribution - Short Ready?

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It has been a bit of a mixed bag for indices as bulls looks to restablish breakouts and/or defend support. However, shorts may be the one to benefit in the near term. The S&P is getting squeezed into the 'bull trap' left by the inverse hammer. It's a good swing trade play, but given today's higher volume distribution I would look for a bearish break with a near term target of 50-day MA. Technicals are mostly bullish, but On-Balance-Volume has been trending down since August - running against price action.
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