Where Large Caps and Tech were relatively unchanged by the close, it was left to Small Caps and Semiconductors to fire the warning shots. Action in the Russell 2000 was the most worrisome.  Tuesday's loss didn't quite reach the 1% mark, but it did confirm the channel breakdown (and removing what had looked to have been a 'bear trap').  The 20-day MA is the next point of support; a second down day here will see this MA tested. The semiconductor index was one of the harder hit sectors. Tuesday's loss is the second sizable loss for this index in a row.  It has come close to a confirmed break of the December 2011-February 2012 trend, although I would give this a little more leeway. Technicals remain bearish. Should early weakness in semiconductors expand into a broader decline, then expect this selling to spread to the Nasdaq and Nasdaq 100. For Wednesday, watch the two aforementioned indices closely.  What happens here will have significant impacts on Tech

After weeks of steady gains, advances in market breadth slowed or reversed. The majority of market breadth indicators are overbought, although some - like the Bullish Percents - still offer room for upside.  Meanwhile parent indices managed to close last week with gains. Swing highs in market breadth often lead swing highs in parent indices, although sharp declines in indices usually occur after a successive series of lower highs and lower lows in market breadth. In the current situation we are probably looking at just the start of such event. A case in point is the Nasdaq Bullish Percents.  The Percentage of Nasdaq Stocks above the 50-day MA has topped out at around 80%.  The last time this breadth indicator topped above 80% was in early 2009.  Back then, the resulting reversal in the parent Nasdaq was barely a blip in its broader advance - it wasn't until 2010 that the Nasdaq rolled over in force. The Nasdaq Bullish Percents haven't reached the rarefied heights of 2009

After yesterday's sell off it was looking easier for bears to push their advantage than for bulls to recover. But in the end, it was bulls which came out tops. Semiconductors had the best of the day's trading. The rally has resulted in a new realignment for the bullish trend and reversed a bearish turn in the CCI.  However, the MACD 'sell' trigger remains. Small Caps also performed well, reversing the breakdown and creating a potential 'bear trap' of shorts. Another 4 points worth of gains will see a new high for the index. Tech indices benefited from the buying in the semiconductor index, preventing what was looking like a channel breakdown.  The MACD trigger 'sell' was also negated. But the S&P wasn't quite so lucky, although the level of buying was lighter than in the Nasdaq or Russell 2000. It's getting harder for indices to attract new investors. Today's buying was on the back of lighter volume, a sign of tiredn

Small Caps had been the weakest index the past couple of days and this under performance came back to haunt the index as rising trendline support was knocked out. Other indices were holding up reasonably well in the morning, but afternoon trading quickly saw sellers take control. The breakdown in the Russell 2000 is clear to see. The good news for bulls is the close proximity of support at the 20-day MA. Next hardest hit by selling were the Tech averages. The Nasdaq suffered a bearish engulfing pattern on higher volume selling (distribution). The selling was accompanied by a MACD trigger 'sell', although the rising bull channel was not broken. The Nasdaq 100 suffered a similar bearish swing, but didn't suffer a MACD trigger 'sell' Fueling Tech weakness has been indecision in the semiconductor index, although the selling was not as bad as experienced in the Nasdaq and Nasdaq 100. Large Caps were one sector to escape relatively unscathed from tod

It was set up to be a down day for the markets before an 11th hour surge pushed the Nasdaq and Nasdaq 100 into positive territory and clawed back nearly all of Large Cap losses.  Only the Russell 2000 was somewhat immune to this buying. The S&P didn't escape totally unscathed. While the index finished less than a couple of points lower, it was unable to prevent a MACD trigger 'sell' or see a confirmed distribution day (although this is really not as bad as it could have been given the small point loss). The Nasdaq fared better.  Today's gain - while small too - registered as heavier volume as accumulation.  And unlike the S&P, retained its technical health. If there is a skeleton in the closet it's the semiconductor index. Rising trendline support was broken a couple of days ago and while the 20-day MA was successfully defended it may contribute selling pressure to the Nasdaq. But while the semiconductors may put the kibosh on the Nasdaq, it

Markets comfortably recovered Friday's losses, doing enough to finish above Friday's start points. Bullish price channels held for another day, taking indices closer to resistance than support, although buying volume eased. It wasn't all fun and games. The Russell 2000 was able to rally off channel support, but was unable to prevent bearish turns in its CCI and MACD.  Relative strength continued to move away from Small Caps to Tech averages - a weakening of overall bullish market conditions - but not enough to break the market. However, this early weakness suggest channel support is likely to break before the index posts new highs. The Nasdaq remains the best placed index to attract buyers. Technicals are bullish with relative strength expanding for Techs over Large (and Small) Caps. The S&P is caught in the middle of the Small Caps vs Tech debate. Technicals are bullish, but a MACD trigger 'sell' is likely to occur in this index of the coming days.

It had to happen at some point, but last week was the first of 2012 to see markets close lower - at least for the Russell 2000.  Large Caps and Tech finished the week flat, but in the case of Nasdaq breadth, it was another week of gains. The Nasdaq Bullish Percents added another couple of points - but has room to travel to resistance. While the Summation Index is very close to all-time highs (and is doing a very good impression of the rally from the March 2009 low). These gains in breadth were enough to keep the Nasdaq flat on the week (on lower volume) Compared to the 2% loss in the Russell 2000 But there was also a flat close for the S&P on the week, also on light volume. Given the length of the rally, last week's losses on light volume were welcome. So a few more weeks like last will nicely set up the next phase of the rally.  But with market breadth close too - if not already - at a point where an extended period of downside is favoured, discretio