Markets staged a recovery after bears were unsuccessful in pushing follow through selling after a break of intraday support in morning trading. However, markets are approaching a decision point where declining resistance on the daily converges with rising support. The S&P offers the classic coiling play. Add to this the presence of the 20-day and 50-day MAs within the coil, with the 200-day MA just below, suggests the next break could set the tone into September. Technicals are mixed with momentum at bullish support, but 'sell' triggers in the MACD, On-Balance-Volume and +DI/-DI.

After all the ups and downs, today was relatively calm. The picture from yesterday is more or less unchanged. The S&P is holding on to its 200-day MA, but given neutral action today and the proximity of the index to this moving average, it was a little disappointing. An undercut and weak finish Friday would set a more bearish tone for next week.

Was today's reversal another short covering rally or the basis for a swing trade low. It was a frustrating day for myself as having effectively nailed the Dow low with an entry at 17,140 (which was a support level on the hourly time frame), I jumped ship just before the rally kicked off. C'est la vie. Volume climbed to suggest a possible capitulation. The problem remains the trading ranges which offer whipsaw risk all around (and keep me flighty in the market). Of the indices, the S&P was again strong enough to finish above its 200-day MA, but the long standing trading range of 2,044 and 2,130 has contained all of these recent swings. If there is some follow through upside, then watch watch happens when it gets close to resistance at 2,110.

Not wholly unexpected, but after yesterday's short covering rally (which stopped me out, grrr...), today brought a return of sellers. However, sellers didn't have it all their own way. Because of this, there may be enough for bulls to build a rally, assuming pre-market doesn't ruin things! The Dow has struggled in recent days, but with a spike low of 17,279 to defend there is a chance for a bounce to make a test of the 50-day MA. Technicals are firmly net negative, which is no surprise, but also oversold.  On the flip side, if there is weakness in pre-market then 17,279 could be scuppered quickly. Today's selling marked as distribution.