After Tuesday's sell off markets have traded into tight coils (inside days) which are traditionally viewed as swing trade opportunities; buy break of high/stop on reverse side + vice versa for a short. The S&P is sitting just above its converging 20-day and 50-day MAs and rising channel support. Technicals are still on the bullish side so I would look for an upside breakout. The Nasdaq has a better coiling setup; today's small doji is an inside day of an inside day. The index has done well to hold above support and is very close to pushing above the 52-week high of 6,460. Technicals are also well placed with plenty of room before they become overbought. Favoured upside. The Russell 2000 hasn't followed the coiling action of other indices, but it is shaping a good pullback which will offer bulls a buying opportunity if it can tag its fast rising 200-day MA. The Dow may be the index to offer shorts something. There was a small loss which accounted for a f

Friday's tight action plus a long weekend of North Korea news left traders skittish and wanting out. However, there wasn't a significant break of support to suggest a rout is imminent but further losses need to be watched. The S&P is resting on rising support but the nature of today's candlestick is not one to suggest tomorrow won't see some follow through lower. The question is whether it will have enough to return above support by the close of business.

Over the course of my vacation, I have seen markets go from a nascent sell off to a recovery bounce. After four days of gains, markets finished the week slow close to, or at resistance. Shorts may find opportunities in Tech indices. The Nasdaq 100 is at resistance with Friday's doji marking a double top with the July bearish engulfing pattern. Adding to this, there is a potential relative performance switch (to weakness) against Small Caps. And there is natural resistance at 6000 to consider too. Technicals are net bullish but stochastics are overbought so some easing even if just turns into a bullish pullback is perhaps favored. Stops go above 6,010.

Friday offered the opportunity for more but in the end it was honors even between bulls and bears. The S&P finished the week on bearish net technicals on higher volume distribution. One positive was a potential doji (and a chance for a 'bullish morning star' on Monday) which is a chance for bulls to buy the open with a stop on a loss of 2,420. Another is the very strong relative performance - when money comes into the market it's the S&P where it's going.