Not surprising to see markets lower on day, but surprised to see significantly higher volume to get with it.  Strong consolidations in the early phase of a rally should come with lower volume.  This is because the weak hands should have already sold on the way down. The S&P closed modestly lower, but there was no great change to the chart besides that. The Nasdaq suffered the most, losing 1% on heavier volume.  The timing was also unfortunate, with converged 20-day and 50-day MAs acting as resistance. The Russell 2000 also sold off, but the selling came from above its 20-day and 50-day MAs, neither of which were breached. Tomorrow may see a test of the swing low.  The resolve of the bulls is likely to be tested as the three day rally comes under pressure.  It will be important these lows aren't violated, as they are tied to key support. --- Follow Me on Twitter Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com . I

Markets opened down on yesterday's close, but were able to finish slightly higher.  The best performing index was the Russell 2000 as it pushed over its 20-MA, adding nearly a percent by the close. The Russell 2000 was again outperforming the Tech indices after a brief respite. The semiconductor index managed to gain from the open, but it wasn't able to finish above its 20-day MA.  It's a little worrying because the moving average is playing as resistance, so bulls haven't yet done enough to suggest a swing low is in place, despite gains the past couple of days. The Nasdaq is similarly pegged by resistance, with converging 20-day and 50-day MAs providing the supply. Technicals are improving, although the Nasdaq is significantly underperforming relative to the S&P. FInally, the S&P keeps the flag flying with a decent volume day at major resistance of 1,470.  A break above this zone would offer bulls something to work with over the coming weeks (and

The indices are attempting swing lows, with the Russell 2000, Nasdaq 100 and S&P offering the clearest support levels off which to work. Stops can be set below yesterday's lows, and a move to - and above - September's highs as targets. Gains in the S&P also resulted in bullish crosses for On-Balance-Volume and the Directional Movement System. The Nasdaq was working from a position below its 50-day MA, and the past two days have seen the index rally back to its 50-day MA. Volume climbed to register an accumulation day, a strong positive, and a better indicator the 50-day MA will hold as support. The Russell 2000 is coming up against its 20-day MA, but has at least managed to hold what was looking like last gasp support at 820. If bears are going to make a move, it will likely come against the Nasdaq 100.  The index rallied well on higher volume, but fell shy of its 50-day MA.  The 20-day MA is also falling sharply and is a day or two away from a 'Dea

The bearish weekly picture is going to dominate for the next few weeks, but the rally off support emerged on the daily timeframe for the S&P and Russell 2000. The Russell 2000 likely offers the best upside in the days ahead. Today's boost off support confirms the importance of 820, and as a place below which to set stops. Likewise, the S&P rallied off channel support, but technicals remained net bearish (as they did for the Russell 2000). The Nasdaq is the most oversold of the indices, but is also the index lacking a strong support level from which to build a sustainable rally. I have drawn a thin line of support from the August lows as a possible location for stops. Although the Nasdaq 100, oddly, has reached a support trendline. It will be important today's lows are not undercut in the days ahead.  If we are looking at swing lows for the indices, then the buck stops at Monday's lows. --- Follow Me on Twitter Dr. Declan Fallon is the

Breadth hits like last week usually fester for another few weeks, before a trade-worthy swing low develops in the parent index.  As a result, longs may be less likely to jump on some of the support levels currently available on the daily time frame. The Percentage of Nasdaq Stocks above the 50-d MA took a big hit, going from a net positive (>60%) to a net negative (45%) by week's end. Nasdaq Bullish Percents are slower to turn, and take longer to shape a bottom. Given its history, the current swing high is looking a little ominous as to what this means for the Nasdaq. Stochastics also support the theory there will be a new low in the Bullish Percents, before there will be a new high.  As the Nasdaq managed a new all-time high with a lower low in the Bullish Percents, does this mean the next low for the Bullish Percents will see a break of May Nasdaq swing low of 2,726? The Nasdaq Summation Index is holding to a net bullish picture technically, although the breadth in

Bulls attempted a morning rush with strong opening gaps, but there was no expansion, and markets drifted lower to close at new lows. Large Caps were least impacted by the selling, going as far as to finish with a small gain.  A move to channel support will provide bulls with an angle for attack, look for this in the first hour of trading. The Nasdaq finished the day with a bearish engulfing pattern, although pattern significance is reduced in the absence of overbought conditions. Again, the 200-day MA is looking like a good downside target. The Russell 2000 offers the best long side opportunity.  The index managed a small gain on the day, but the 50-day MA and trendline support are close together, along with key horizontal support. Stops can go on a loss of 815. The Nasdaq 100 is also offering a support buy at the trendline, although the index is caught between its 50-day and 200-day MA. Will markets offer bulls something tomorrow? The Russell 2000 and the Nasdaq

There was no last stand by bulls. Instead, further selling knocked more indices into net bearish territory. The semiconductor index was again the worst hit index.  The next point of support for the indices is the double bottom down at 350. There is very little in the way of alternative support to suggest it won't make all the way there. The Nasdaq lost further ground to its channel support, and was unable to regain 50-day MA support. Volume also climbed to register net distribution. The next support level is down at 3,000, likely 2 or 3 days away from a test. The Percentage of Nasdaq Stocks above the 50-day MA also turned net bearish technically. Soon, fewer than 50% of Nasdaq stocks will be above this key moving average. Small Caps were least impacted by the selling, digging in at 50-day MA support.  However, the lack of selling couldn't prevent a net bearish turn in technicals. It's still the index most likely to lead higher.  While it didn't play to