Not surprising given the gains in recent weeks, but sellers made their presence felt on higher volume. The good news was there was no real damage done to the trend, and technicals remain buoyant. The S&P kept its nose above the rising channel. An undercut would set this up for a move back to channel support.

Small Caps got a key uptick against the Nasdaq after two months of underperformance, although the Russell 2000 continued to lag against the S&P. However, today was important day for re-establishing the importance of Small Caps as a component of the broader rally. No rally can sustain itself for long periods without the participation of the Russell 2000.

No great movement or volume, but at least the push was higher.  The S&P continued to track along upper channel resistance.  Technicals still in good shape despite overbought stochastics.

Unusual behavior in New Highs / New Lows.  After what looked to have been a fairly reliable peak in the number of (smoothed) NYSE components at new 52-week highs, now looks set to make an even higher high. Given the last peak was a 10-year high, it's odd to see this challenged so soon. However, it does point to the overall strength of the rally to have so many components making new high - a total contrast to the action in the 2007 top.  The current situation has far more in common with peaks in 2004 and 2010, which marked consolidation points of larger rallies

Modest losses were not unexpected given the sequence of gains. The S&P made a pitch perfect rebuttal off channel resistance.  Bulls may try and repeat the action of January and February, when the index bounced along the upper resistance line.

After pushing a breakout yesterday, today saw the Russell 2000 build on this momentum.  The advance helped push its relative advance against the Nasdaq, but it will take a number of days before the broader trend in relative strength changes.

Bulls kept things moving, although in my  sectorbreadth  analysis, the once strong Utility sector took a big hit to fall to (joint) last spot.  The Russell 2000 finally posted its breakout. This didn't really change the relative underperformance of the index to the Nasdaq, but there was a gain against the S&P.  However, it did manage to reverse the brief 'Death Cross'.