It was a good day for indices, with the S&P rallying off its 200-day MA, and the Semiconductor Index breaking upside from its wedge. The Semiconductor Index closed with a 'Death Cross' between 50-day and 200-day MAs, while the breakout generated some bullish technical signals. The risk:reward remains good, even for a push just to the 50-day MA, and pullbacks will help lower this risk.

After Thursday's selling there was some follow through in the morning, but buyers stepped up to the plate to retake most of the losses by the close of business. Not all indices are in the same degree of trouble, and for some, range bound trading remains. The Nasdaq closed above a former support level of 5,038, but with range support down at 4,900 what's happening now is mostly noise. The Nasdaq is still a distance away from a 200-day MA test, and while certain indices are testing (or have lost) such support, Tech indices have left bulls with plenty of room for maneuver.

Yesterday's spike reversals came back to haunt the indices as markets followed yesterday's late selling with even more selling; selling which registered as distribution for some indices. While the Dow is under the most pressure, the greatest disappointment was the Russell 2000. The selling resulted in an undercut of the 200-day MA, a break which followed soon after a recent successful test - a sign this test may not hold. Next key support is 1,210, and from there one is looking at tests of 1,100 and 1,040.

I should start by saying I have a short bias. It's not a clear cut play given the dominance of trading ranges since the start of the year, but sellers may be looking to turn the screw. Holiday volumes will keep things scrappy into September, but markets may get a kicker before then. The most vulnerable of the indices is the Dow. It's knocking below 17,625 support after falling below its 200-day MA for a second time in July. Bears will hold control as long as the index is below 17,800 (and 200-day MA). Technicals are weak, and nearly oversold, but three of the last four trading days have registered as distribution.