Markets didn't take too kindly to the debt downgrade by the 'shouldn't be listened to' S&P rating agency but were able to regain some of the lost ground by the close of business. The Nasdaq showed the impact of today's announcement the best; a powerful gap down against Friday's higher close, a sell off which fed off this momentum, but a recovery which took the index back to its open price, although well off where it finished Friday. Higher volume ranked as distribution, but relative to the volume selling in Large Caps it wasn't so bad. Technicals, not surprisingly, worked their way lower. ($COMPQ) via StockCharts.com The S&P took some solace from defending former channel resistance turned support. Unfortunately, there was more volume selling than in the Nasdaq and it did close below its 20-day and 50-day MAs. ($SPX) via StockCharts.com The Dow made the best of a rough day, recovering enough to actually finish above its 50-day MA. Volume re

The weekly view of the markets remains bullish enough, helped in large part by the successful defense of the breakout in the Nasdaq 100. Selling volume has also been light. While many indices remain stuck under resistance, there are still broad bullish channels at work. The opportunity for bulls to flex their muscles will come when markets drift far enough sideways to hit support of these channels - then bulls will have something concrete to work with. The Nasdaq 100 has the chops to muscle higher. Notice how the MACD histogram continues to make higher (reaction) highs and the current decline has effectively flatlined (i.e. not getting any weaker). ($NDX) via StockCharts.com While the breakout continues to hold sway in the Nasdaq 100, the Nasdaq has a good opportunity to follow higher. Nasdaq via StockCharts.com The Nasdaq bullish percents have also dug in a 60% support (good enough to give this rally another push with the majority of stocks on 'buy' signals) ($BPCO

It was a reasonably good day for markets. Buyers were able to defend 20-day and/or 50-day moving averages, in some cases with higher volume. The S&P finished with a bullish hammer on its 20-day MA, although the lack of oversold stochastics weakens the reversal potential of this candlestick. The low of the day almost back tested former channel resistance (turned support). As a sidenote, there was a 'buy' trigger for on-balance-volume. ($SPX) via StockCharts.com The Nasdaq defended its 20-day MA as the MACD switched to a 'sell' trigger. ($COMPQ) via StockCharts.com The Percentage of Nasdaq Stocks above the 50-day MA also turned to the "Dark Side" as technicals finished net bearish. This will increase selling pressure in the parent index. ($NAA50R) via StockCharts.com The Russell 2000 was able to defend its 50-day MA and finished the day at the day's high. ($RUT) via StockCharts.com While the Dow spiked low at its 50-day MA, but like for

It wasn't surprising to see buyers step in at key 20-day and 50-day moving averages. Although light volume reflected a truer lack of buyer enthusiasm. The S&P finished on an indecisive doji, backed by a MACD 'sell' trigger. ($SPX) via StockCharts.com The Nasdaq rebounded a little, having ducked below its 50-day MA yesterday it was able to close above it today. via StockCharts.com While the Russell 2000 dipped down to its 50-day MA at the low of the day before recovering by the close ($RUT) via StockCharts.com While the Dow also pegged its 20-day MA with a doji and MACD 'sell' trigger of its own. ($INDU) via StockCharts.com The presence of the 20-day and 50-day MAs offered buyers an opening which they kind-of half took, based on the doji candlesticks displayed across the different market charts. However, the indecision doesn't appear to be enough to halt the momentum of bears. Bulls will likely have another crack at it in the morning, but if

Broad selling saw markets reach down to their 20-day/50-day MAs. Bulls will have their opportunity to defend tomorrow, but there is reason to suggest it might not be enough. Hardest hit on the day was the semiconductor index. Tuesday's losses effectively confirmed the bull trap, made worse by the fact it failed to close above its 50-day MA when it tested it last week. Technicals remain very weak, with only the MACD clinging on to a weak 'buy' signal. ($SOX) via StockCharts.com The Nasdaq 100 finished on its 20-day MA with an indecisive doji on higher volume distribution. Selling volume was enough to produce a 'sell' trigger in on-balance-volume, another tick to the bear side. The thing which will most give comfort to bears is the failure of the index to challenge and close the February breakdown gap. ($NDX) via StockCharts.com The Dow is mapping a potential double top with a picture perfect refusal at resistance. Higher volume sides with bears. ($INDU) v

The loss in quality of stock breakouts combined with the slow rollover in markets has left the broader rally vulnerable to a more substantial decline. However, there is still the issue of 20-day and 50-day MAs as support. So buyers have a logical place to step in and defend. The Russell 2000 closed below 836 and triggered a 'sell' in the CCI. This is a worrying development as it has been the key driver of the rally in recent weeks. ($RUT) via StockCharts.com While the Nasdaq looks to have swung from bear trap to bull trap as the breakdown gap from February remains valid. Volume climbed to register confirmed distribution as it came close to a 50-day MA test. ($COMPQ) via StockCharts.com Finally, the S&P lingered below 1,343 resistance with only lighter volume to offer as any consolation. ($SPX) via StockCharts.com Further losses are likely until indices test 50-day and/or 20-day MAs (whichever is higher). For tomorrow, another day like today would not be surpr

Stuck with a bit of a head cold, but more importantly - temporarily "homeless" as we seek a new rental. Not a whole lot of choice in our area suitable for two young whipper-snappers! Because of this, likely will be post-light until next week and will play it by ear from then. Market was a smidgen more volatile than yesterday, but only the Russell 2000 appeared to suggest a pullback is in the making. ($RUT) via StockCharts.com Follow Me on Twitter Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com . I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed trade signals. You can also view the top-10 best trading strategies for the US, UK, Europe and Rest-of-the-World in the Zignals Trading Strategy Leaderboard . The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements. Zignals offers a full suite of FREE finan