Big gains as uncertainty over the U.S. debt deal eased (although it was somewhat surprising to see so much buying). Ordinarily, one day gains as big as today's tend to be bearish over subsequent days and it will be interesting to see things play out over the next few days. The index best set to post further gains is the Dow Industrial Average.  Today's gains created a 'bear trap' in the index which makes any move back to the channel a buying opportunity. Stops go on a loss of the 200-day MA or 14,720.

There were a number of support tests, but the clearest belonged to the Russell 2000.  The index made a picture perfect bounce off channel support, although the subsequent recovery didn't quite make it back to the 50-day MA. Technicals are just shy of a net bearish turn, but there is still time for this tomorrow despite today's gains. Watch for another down day which remains above channel support but below Wednesday's close.

Disappointing not to see bulls make a better challenge on 'bull traps'.  Now indices are left with it all to do. Broader channels point to a bull trend, and it will be left to the Dow to indicate how such channels will play as support. The initial prognosis is not good. The Dow cleanly sliced below channel support and will probably see a test of the 200-day MA tomorrow.

My weekly summary is of greater relevance after today's action.  Markets' just can't make their mind up - up one day, down the next. Today was the return of sellers on relatively light volume.  Large Caps carried the brunt of the selling, Tech indices were relatively resilient, while the Russell 2000 undercut its 20-day MA. The Dow is on its way to channel support, and will likely see this tested tomorrow. It may be enough for an aggressive long side trade, although the chance for a follow through to the 200-day MA is quite high.

As things have got a little scrappy on the daily timeframes it's best to look at the weekly charts for some perspective.  The Russell 2000 has proved itself as the lead index with a sharp acceleration in its bullish trend since the end of 2012.  The narrow channel is the one it currently honors, although given the angle of ascent it won't be able to sustain that forever. The broader channel from the middle of 2011 is the one determining the secular trend.  When the narrow channel breaks, then look for either the resistance line of this channel to play as support (given prices are above such levels), or failing that, look for a move down to broader channel support - currently around 925.

Thursday proved to be a bit of a roller coaster, with some markets doing better in recovering big morning losses than others. Volume did climb to register a distribution day, but given the extent of the day's range I was surprised it was not higher. The Dow was again took the brunt of the day's selling.  Lower channel support appears to be the target, but wouldn't be surprised to see it go as far as the 200-day MA, an average last tested over a year ago.

Another good day for bulls, where early selling was unable to take out the September low for the S&P or create a 'bull trap' in the Russell 2000. The Russell 2000 is offering the best bullish momentum opportunity - today's pullback a good potential entry.