After yesterday's losses it will have been of some relief markets took a breather. However, markets did not go entirely unscathed. The semiconductor index lost nearly 1% in what amounted to an undercut of the 20-day MA, leaving a 'bull trap' in its wake. A MACD 'sell' trigger was also generated.

Well, those who took the plunge to short the Russell 2000 got their money's worth today. Stops could be lowered to breakeven or better, and more downside is probably on the cards. A dead-cat bounce back to the 20-day MA, much like what happened in early November, is what to watch for tomorrow.

A near 1% loss for the day dropped the Russell 2000 back to support marked by the October swing high. Also here is the 20-day MA, another point to work as support. More worrying was the close near the low of the day, suggesting further losses are likely.

Updated the last three days of action into the sectorbreadth chart.

The good news is that Friday's gains held up. The bad news, is little more was added to those gains. Today's highs in the S&P didn't take out the all-time high, but there was a relative swing in favour of Large Caps over Small Caps.

It was a valiant attempt by bulls to arrest the declines in Large Cap indices. It probably did enough to scare off shorts looking to attack Thursday's sell off, but volume wasn't exactly supporting the % gain. The S&P was able to stick its nose back above the channel line and regain its 20-day MA in the process. It's a mini-'bear trap' for those who may have shorted the cut below the 20-day MA (which pushed the index back inside its channel).  Technicals split bullish/bearish, although Friday's price action hands the ball back to the bulls.

It has become a little more difficult for Large Caps following Thursday's losses. The November channel breakouts have now failed for both the Dow and the S&P, with the next move likely to be a challenge of the November swing low/50-day MA in the S&P, and 50-day MA for the Dow.  Short plays in these indices can use a close above the 20-day MA as a cover.