The late day flurry of buying added some gloss to what had been a struggle through the day. The lack of volume tempered the gain, but todays buying did occur at channel support. The clearest bounce was in the S&P. The rising channel played well as support although the declining 20-day MA is providing supply pressure. Buying in the Nasdaq kicked off before channel support was reached. Unlike the S&P, its 20-day MA is ticking higher, although the rally wasn't enough to finish with a close above the 20-day MA. The real action was in the semiconductors. Unlike the aforementioned indices, trading was concentrated around channel resistance, not support. Today's close may be enough to register as a breakout (it needs follow through), but it was accompanied with a sharp gain in relative strength to the Nasdaq 100. May's decline may now be at an end. The focus for tomorrow should be on semiconductors. Gains in other indices are unlikely to change the big pic...

Accidentally overwriting my weekly charts was not the smartest thing I have done, so I have had to recreate my charts to bring them back from the dead. Markets had a rough week, finishing near their lows as Friday was another bad close on the week (just as it was the previous week). Traders just aren't keen to hold stocks over the weekend. Starting with the Russell 2000, a scrappy bear flag still looks favored trading action; although price spikes leaves most of the pressure on support, not resistance. However, long-term stochastics are oversold and ticking higher. Similar story for the Nasdaq. A thick band of support between 2,100 and 2,160 looks the most likely test zone. Nasdaq Bullish Percents working off oversold levels. So while the bear flag is in play, a rally from oversold conditions in the parent index is favored before the bearish divergence becomes a factor in 'forcing' the Nasdaq lower. Same is true for the Percentage of Nasdaq Stocks above the...

A bit of a mixed bag. The strongest performer yesterday (Russell 2000) gave back the most today. Semiconductors looked ready to break from the channel - and did so briefly - but finished the day back where it started. Large Caps escaped relatively unscathed while Tech averages experienced distribution. The S&P had a switch to a 'sell'  in on-balance-volume. Volume was below yesterday's so no distribution. The index looks ready to make another pass at its 20-day MA.   The Nasdaq experienced distribution as the index made an attempt on breaking past the bull trap. If stochastics were overbought I would have considered today a bearish harami cross - but that isn't the case. Like a court card in a deck of cards, we are looking at two opposite head-and-shoulder patterns. Which one holds true will depend whether the August swing low or the September swing high breaks. While Small Caps gave back a large chunk of yesterday's gain, but its relative position ...

Markets were able to take advantage of Futures strength, building on opening gaps and pushing higher into the close. Next are the bull traps created by the failed double bottoms. These bull traps form the anchor points for rising channels. Although there is probably another 1-2 days worth of gain before such supply becomes a concern. The S&P rally was on low volume but recent volume has been light. Look for resistance when the rising channel meets the falling 50-day MA (currently at 1,248). The Nasdaq is running closer to 2,616 resistance (June swing low) in addition to channel (and 'bull trap') resistance. It will likely find it harder to follow through on gains tomorrow than the S&P. What will help the Nasdaq is potential stealth accumulation in the semiconductor index. The angled channel is more likely to break into a sustainable rally rather than rising channels observed in major indices. The Russell 2000 enjoyed the biggest gain on the day but ...

It wasn't a pretty start, although most of the damage was done yesterday in the Futures market rather than today. The recovery took a while to get going, only picking up steam when European markets shut their doors. The bounce from lows was enough to confirm angled consolidations which may suggest more upside for tomorrow. The S&P has the 'cleanest' looking channel. The index closed just below its 20-day MA, but a continuation of the late day surge could see this work as support. Volume climbed to register as distribution and there was a 'sell' trigger in on-balance-volume. S&P 500 Large Cap Index ($SPX) via StockCharts.com The Nasdaq hasn't quite got the consolidation definition of the S&P, but the bull trap is clear. Volume climbed to register distribution. Nasdaq Composite ($COMPQ) via StockCharts.com Meanwhile, the Russell 2000 had a quiet day. It didn't suffer the large gap lower at the open, but didn't rally strongly eithe...

Friday's sell off did much to turn what had been a respectable performance by the indices up 'til then. The poor jobs data combined with tetchiness over the Labor Day holiday (Futures are down) may well carry over into Tuesday's open. What had looked like market double bottoms have instead morphed into larger consolidations. Consolidations which typically break in the direction of the prior trend, which in this case is down. But it's not all doom and gloom. The Nasdaq was repelled by 2,535 resistance and for now (at least) is caught between 2,125 support and 2,535 resistance. Volume was again lower last week and intermediate term stochastics are oversold. These conditions resulted in the crash of 2008, but there isn't the same level of vulnerability here (there is more support to work with). More of a case of once bitten, twice shy. The Nasdaq 100 was caught by supply at former channel support. In the end, the index finished below 2,217 resistance but abo...

It had to happen eventually, but it looks like Small Caps have blinked first. Thursday's losses took the Russell 2000 below its breakout support, pressuring double bottom breakouts for Large Cap and Tech indices. This resulted in a relative shift in strength away from Small Caps to these indices. ($RUT) via StockCharts.com The S&P also made gains relative to the Russell 2000 (by simply not losing as much!). The index finished on double bottom breakout support. Another day of losses will see a bull trap here too. ($SPX) : via StockCharts.com The Nasdaq came under a little more selling pressure to leave it just below breakout support - but perhaps not enough to confirm a bull trap. ($COMPQ) via StockCharts.com Any losses tomorrow will confirm bull traps and drop indices into new trading ranges. Look to Futures to set the tone for the day; a gap down at the open may prove tough to recover from. Follow Me on Twitter Dr. Declan Fallon is the Senior Marke...