Today was a decent day by bulls, coming in at key moving averages and closing the day with bullish engulfing patterns in major markets. This has the look of a buy-the-dip style low, but needs follow through over the next 5-7 days. The Nasdaq found buyers just above 4,900 and the 50-day MA. Buying volume was a little light, but that might be enough to lull shorts into a false sense of security.  The relative performance of the index continued to shift towards Large Caps and away from Tech, which may be a worry if the rally doesn't kick on.

Another day of selling took markets further away from their highs and into more well defined profit taking. Near term, there should be a rally to mount a  retest of October highs, and how this rally behaves will determine if this is a pullback or just a relief rally. The index to guide this differential will be the Russell 2000. Friday saw a finish on former declining resistance trendline, turned support. Technicals are weakening, and another couple of days like Friday would be enough to shift this net bearish techincally. As it stands, the current sell off could still be viewed as a bullish pull back and Monday is nicely set up for a rally.

There was no doubt who gained control of markets today. The S&P cut clean through the 200-day MA and is on course to test former resistance turned support. This latter level will soon coincide with the 50-day MA. Relative performance has pushed ahead of the Russell 2000.

The 'buy-the-pullback' of yesterday was thrown into a bit of doubt as sellers made some early inroads into those gains. The bullish 'hammer' in the S&P which had marked support at the 200-day MA for a second day is under some pressure. It comes on the back of a 'sell' trigger in the MACD and a decisive 'sell' trigger in On-Balance-Volume. Substantial gains banked from September are under threat from profit takers. The question is whether buyers can come back and swing this back to accumulation than current distribution.