The sharp angle (i.e. pace) of the selling proved too much for 200-day MAs to provide a defense. Worse still, the lows which offered a point of reversal in the flash-crash were of no help today. The S&P made a new closing low and finished just above early May lows. But even with the sharp losses, relative strength swung away from small caps to large caps - a bearish development. ($SPX) via StockCharts.com Tech averages were of little help. The Nasdaq sliced its 200-day MA ($SPX) via StockCharts.com And while the semiconductors were able to mount a defense at what is increasingly looking like support, it did so by violating what I suggested to use as a stop. Tomorrow may provide another bite of the cherry with a broader stop at 331. ($SOX) via StockCharts.com Small Caps took it hard too, but the 200-day MA wasn't tested. ($RUT) via StockCharts.com Friday will probably see a positive close with reasonable chance of a gap higher. But a snap back rally will simply ...

Today saw further losses to take the S&P to its 200-day MA and it did so with higher volume distribution. Stochastics remain in neutral territory with OBV and MACD continuing to trend down. Whether there is enough demand to defend the 200-day MA remains to be seen but technicals suggest there is more downside to come in the days ahead. ($SPX) via StockCharts.com The Dow also switched to a 'Death Cross' between 50-day and 20-day MAs. Selling volume was significantly higher and technicals - not surprisingly - are weak but not weak enough to suggest a bottom. Still room down to 200-day MA. ($INDU) via StockCharts.com The Nasdaq posted a 'Death Cross' but has yet to challenge its 200-day MA. Tech has started to underperform Large Caps once more and technicals point towards lower prices (and therefore a likely retest of May lows). ($COMPQ) via StockCharts.com Only the semiconductor index made an attempt at a bounce ($SOX) via StockCharts.com So while the...

After a 4-day weekend it was back to the selling which has controlled the market since last week's tests of key moving averages. The S&P is on course to make another pass at the 200-day MA but it's unlikely it will find support here given the sharp angle of the drop. A retest of May lows is looking inevitable but if the angle of descent remains the same it may not stop when it gets there. But for now, assume the 200-day MA at 1,101 will offer some protection to the downside as the index has yet to close below this key long term moving average. ($SPX) via StockCharts.com The Nasdaq suffered a similar fate with a large bearish engulfing pattern, but Nasdaq is not overbought so it's a weak candlestick match. However, with because it's neither overbought nor oversold bears will have the edge on Wednesday. A "Death Cross" pending between 20-day and 50-day MA offers further bearish pressure. ($COMPQ) via StockCharts.com While Small Caps - with the ...

While the S&P honored 50-day MA resistance which it had failed to break yesterday, the Nasdaq wasn't able to maintain its hold above the 50-day MA. Early gains took the Nasdaq up to the 20-day MA but in the end it finished near Wednesday's low. ($SPX) via StockCharts.com ($COMPQ) via StockCharts.com Small Caps, which had been leading the markets higher, stumbled at the 20-day MA after it pushed through its 50-day MA yesterday. The 'spinning top' marks indecision so it is by no means certain bears have control. ($RUT) via StockCharts.com The semiconductor index also struggled at declining resistance. ($SOX) via StockCharts.com Friday is likely to see lower prices given the presence of declining resistance and/or 20-day/50-day MAs. In addition, the willingness of buyers to defend Monday's rally will be a key factor in how far markets fall over the next couple of days. Follow Me on Twitter Build a Trading Strategy in Zignals; Read how and earn...

It was Small Caps which took the market by the scruff of the neck and powered past 50-day MA and never looked back. The Small Cap rally went all the way to the 20-day MA which may see some selling tomorrow, with preliminary channel resistance drawn from late April highs lingering around 720. ($RUT) via StockCharts.com Strength in Small Caps likely kept shorts wary on attacking 50-day MAs for Large Cap and Tech averages; in the case of the Nasdaq it was able to close above its 50-day MA, but a declining 20-day MA is only 25 points away and may provide supply on Thursday. Relative strength swung back in favour of Tech over Large Caps. ($COMPQ) via StockCharts.com And Small Caps over Large Caps - where the 50-day MA remained resistance. ($SPX) via StockCharts.com Semiconductors also enjoyed the day and closed above its 50-day MA with declining resistance in play for Thursday ($SOX) via StockCharts.com We have seen three strong days in a row after four hard days down. Is t...

Monday's bounce ran into the first of its struggles at 50-day MAs. Volume again dropped to yesterday which is a mixed bag given the indices themselves closed below their intraday highs. The S&P had a picture perfect reversal off its 50-day MA. The doji implies indecision and suggests Wednesday may finish with lower prices, particularly if the S&P opens the day by gapping lower and below the lows of today. ($SPX) via StockCharts.com The Nasdaq was able to close a little above Monday's close but like the S&P was repelled by the 50-day MA. ($COMPQ) via StockCharts.com The Russell 2000 closed above its 50-day MA, but while this may give hope for bulls there is instead a declining 20-day MA to pressure longs. There was a CCI 'buy' signal to suggest there may yet be another couple of days worth of gains to be had. ($RUT) via StockCharts.com It looks like shorts are playing the percentages but if there is a drive above the 50-day MA there is a good c...

Earlier during the day I gave my two cents on the events of last week and what to look forward too over the next ten days on the Zignals blog. In light of this, what had Monday's close to offer? The Nasdaq is the index to study first given Monday's opening gap showed where all the bullish strength was focused. There was little follow through with the day closing on a relatively narrow range day (compared to the selling which has gone before). The 50-day MA is the nearest point of resistance and is still some 35 points away from the day's close. Upside volume was well down on prior selling - another bearish sign. ($COMPQ) via StockCharts.com The lack of the gap for the S&P offers a more misleading picture of the days' events - other than the low buying volume. Again, the 50-day MA at 1,171.6 is the resistance area where shorts are likely to get aggressive. ($SPX) via StockCharts.com The Russell 2000 rallied nearly 6% but it finished just 4 points shy of it...