Since the breakdown in wedge support it had looked easier for bears to push indices down to 200-day MAs or lower channel support but action over the last week with two bullish hammers suggests longs may have a launch pad to work with. The S&P is offering a nice setup with the 'bullish hammers' just above the 200-day MAs. The only disappointment was the 'sell' signal in relative performance in the Russell 2000.

Markets started the day strong - challenging resistance - but were unable to press this advantage.  Many indices closed lower, leaving 'black candlesticks' which are typically bearish when formed at 'swing highs' but still favor weakness even in the absence of the swing high setup. The 'black candlestick' for the Nasdaq at resistance suggests a move towards the 200-day MA but for this to happen there needs to be an immediate downside; any recovery has a strong chance of negating the 'black candlestick'.

Yesterday's recovery set the groundwork for a bounce but the gap higher took away most of the opportunity the bullish set-up offered. Weakness at this point would be bearish so wouldn't be buying but if in then hold until the morning breakout gap closes and reassess. The S&P generated a small uptick in relative performance but not enough to trigger a 'buy' signal yet. Other technials are mixed with 'buy' signals in the MACD and On-Balance-Volume are offset by 'sell' triggers in +DI/-DI and Stochastics.

After yesterday's selling today's late recovery was a chance for bulls to catch some breadth. The S&P came close to tagging the 200-day MA on the intraday low. The index is on a path to the lower channel. There was no technical change and relative performance remains weak.