It was a generally quiet day for markets with Small Caps feeling most of the pressure. The S&P took a quarter percentage loss as it gave back a small amount of last week's gain. There was no technical change on this loss. Nothing to be too concerned about.

The bright start to the year continued as bulls were able to maintain buying pressure for three of the four first trading days of the year. The S&P closed near the highs of 2016 with all key moving averages in upward trends. The MACD is still holding to a 'sell' trigger, but this is heading towards a new 'buy' trigger, which given the strong position relative to the zero line would instead register as a pullback 'buying' opportunity.

End-of-year profit taking has given way to start-of-year buying. The best performer on the day was the Russell 2000. It gained over 1.5% as it broke upside from its consolidation. While the gain did little to reverse the MACD 'sell' trigger it does look like action has kicked off a measured move higher.

2017 opened with a positive start on higher (albeit low) volume accumulation. The late flourish in the market following the election results helped close 2016 on a positive note. So what will 2017 bring? The S&P wasn't able to hold the bulk of Tuesday's gains, but it did reverse the damage from last Friday.  Not surprisingly, recent volume has been very light so it will be important to see how this changes as traders go back to work. The only technical change over the holiday period was a 'sell' in the MACD.

The initial upside breaks from the coils are faltering a little. The index showing the most vulnerability is the Nasdaq. There was some recovery before the close of business, but the damage has already been done. Technicals are still holding on the bullish side, with the exception of relative performance (against the S&P). Volume climbed to register distribution, but in holiday volume terms.

Action into today had looked to offer bears the advantage, but it was a morning gap higher from buyers which gave bulls the initiative. Beyond the opening gap there wasn't too much more buyers were able to achieve, with the exception of the Russell 2000, but today's gains would be enough to put bears/shorts on the defensive.  The lack of upside follow through may offer more aggressive shorts an opportunity. The Dow made a clean upside break of the consolidation.

The indices had another inside day (in a series of inside days) to set up a good swing trade play. With the emergence of spike highs it would suggest a break lower is the favoured move (along with indices performing relatively weak against their peers), but if shorts jump the gun and markers emerge from the coil higher then those shorts will be forced to cover - fueling fresh buying. The S&P is showing this coiling action best: