The Nasdaq made modest gains, enough to take it above its 20-day MA but perhaps not enough to clear mini-channel resistance. It was the kind of day to register a gain on paper but produce little in reality. Small gains in the Russell 2000 weren't enough to register a close above the 20-day MA, or reverse the channel breakdown. The SOX closed lower on the day So - in the end little changed on yesterday. Odds favour bears, but a strong opening hour would probably set the tone for a decent afternoon given the proximity of prices to resistance. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts , stock charts , watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.

The Nasdaq registerd an accumulation day but stalled just shy of its 20-day MA. I have drawn in a new mini-down channel which if true will see weakness from Wednesday's open and not look back until channel support is tested. The Dow fared a little better in it finished above its 20-day MA, but might yet succumb to channel resistance of its own Small Caps posted an almost 2% gain but like Tech stalled at its 20-day MA, and stalled at 3-month former channel support - turned resistance. Not good news for bulls and an opportunity to short Semiconductors mimicked small caps with the channel break and stalled rally As for tomorrow, look for weakness to return but if bulls can pull it back in the afternoon then there is reasonable expectation for upside breaks from developing mini-down channels. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts , stock charts , watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too

Large and Small caps got a welcome boost with a decent percentage recovery. But Tech disappointed, with low volume only compounding the disappointment. In the end considerable work was left for the indices to do to erase last Thursday's losses. The Nasdaq is holding 50-day MA support but the sharper channel breakdown remains and relative strength has shifted back in favour of Large Caps; a bearish shift to safety. Given the decent bounce in large caps the question now becomes what happens when they approach 20-day MAs? The Dow has made a picture perfect defense of the 50-day MA so how far can it take the bounce? The Semiconductor index saw a neat negative turn in technicals even with today's gains The Bullish Percents saw a bearish 'sell' trigger in the MACD - enough to redraw the 5-month negative divergence. There was also a bearish cross in the directional index with the bear trend gaining over the bull and in stochastics too. All supporting technicals are now bearish

Bears reared their head last week, but have they done enough to dent the confidence of bulls? The Stockcharters discuss. Anthony Caldaro of Objectiveelliottwave has a clear major 'B' of an 'ABC' corrective phase in place for the 60-min SPX; so will the next rally stop short at last Monday's highs? The alernate (bull) count was given for the DOW - not sure I see this as a triangle though (necessary for an 'abcde' count). Yong Pan of Cobrasmarketview has a clear bearish intermediate picture but a mixed view on the short terms Gap support for a bounce play in the SPY Resistance playing out nicely Good downside targets from the triangle breakdown Confirmed 'Sell' on breadth Richard Lehman noted new, sharper, down channels. 10/3 -- I think the channels are giving us a good read on what's happening now. The short term charts have all broken into purple downtrends. Because it is universal, there is little doubt. The only chart that is still climbin

Resistance was confirmed in many of the indices, but volume was considerably lighter and although the week closed lower it did not register as a distribution week. The S&P remained pegged by 1,062 resistance as the bearish divergence in the MACD histogram continued to evolve The Nasdaq's losses weren't enough to reverse its breakout - although technicals suggest there is more downside to come. The Nasdaq 100 bucked the trend a little by registering a distribution day and falling below what were two resistance levels turned support. Small caps played resistance picture perfect but have yet to confirm a 'sell' signal Market Breadth has already fallen sharply - particularly in the percentage of stocks above the 50-day MAs Although some remain stubborn - but seriously overbought Look for this weakness to continue to develop with a sideways market perhaps the best outlook for bulls, but a more substantial down phase favoured. Dr. Declan Fallon, Senior Market Technician,

It has been a while since there was a days selling like today's. The Nasdaq suffered a break of the rising black channel in addition to the crack through the 20-day MA on heavier volume distribution. The Dow finished very close to its 50-day MA. Given the day that it was I wouldn't be surprised to see a gap down below this MA (Friday) before the fight at the MA develops. Small Caps broke from their July-October channel and 20-day MA leaving 50-day MA then August reaction low to test. Bearish cross in the directional index between -DI and +DI. The greatest damage was done to the semiconductor index. Gone from defending a breakout to a clear breakdown. Bull trap firmly in place and the 50-day MA may not be enough to help. Whereas yesterday could have gone either way today was a clear message to bulls to stepaside. We haven't seen a significant test of the 50-day MAs since June so expect prices to trade around this key MA for the next few days as bulls and bears line up their

After a very weak opening period bulls were able to rally the troops back into the close. The call-to-arms was triggered by the respective 20-day MAs of the indices but whether they can act as support again if tomorrow opens weak will be open to question. The Nasdaq registered a technical distribution day as on-balance-volume managed a bearish cross of its trigger line (adding to the earlier MACD trigger 'sell') There was a bearish shift in relative strength as tech stocks gained an edge over small caps {Tech > Small Caps > Large Caps} - a more bearish alignment for markets. The S&P made its own support test, not just of the 20-day MA, but of the rising black channel too. Tomorrow will be interesting - a gap down and a move to break the 20-day MAs would look favoured. But even a higher open will see resistance at Tuesday's highs which again looks to give bears the edge for Thursday. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts ,