There was no real surprise to see the gains from Friday come back a little as Thursday's lows play a siren song. The most likely outcome is a consolidation pennant as prices focus off last week's lows - this might take a week to play out but the surge in volatility may see some pushback to stabilize price action. The S&P finished just below 200-day MA as it inches back to 2,710 lows. I would be looking for more small losses or a neutral doji. The best of the action is the strong relative performance (against Small Caps) which runs contrary to price action itself.

Last week's selling had put pressure on markets not seen since 2016 but the run of good form has meant Tech and Large Cap Indices are only now testing 200-day MAs. There was a brief overshoot on Thursday but the week closed more settled. The S&P did well to make it back to its 200-day MA but it complicates the risk:reward which now has a loss of 2,710 as the place for a stop which is well outside most comfort zones. Given that, I would look for some retest of 2,710.

The support levels which were on offer for the Russell 2000, Dow Jones Industrial Average and S&P were undone by the biggest 1-day loss in the year. Not surprisingly, volume rose in distribution as traders bailed.  The only index to finish on support was the Nasdaq 100. Although with a 4%+ loss it would be a brave trader to be buying the 200-day MA.

Today is a simple call for action. On Friday, the Russell 2000 tagged its 200-day MA in a manner which was picture perfect for those peppering the 200-day MA with GTC 'buy' orders.  Monday was the second chance for a slice of this action with another tag of the 200-day MA. If there is a 200-day MA fail it will be a clean sell but as this is oversold on near-term and intermediate stochastics it's looking like a relatively low risk buy with stops on a loss of 1,615 and an initial target of 1,715 - a healthy risk:reward with the index closing at 1,630.

Indices recorded another set of losses but some now offer an opportunity for longs. Best of these belong to the Russell 2000. The Russell 2000 managed a picture perfect tag of the 200-day MA with Friday's lows making it to 1,618. Shorts trading the tag (of the 200-day MA) will have come out with a nice profit and aggressive longs may have also used the opportunity to trade a bounce with a buy.

Small Caps weren't able to recover the channel and another 1%+ loss was chalked up. It's looking ever more likely a tag of the 200-day MA is on the cards. Relative performance actually ticked up despite the loss but this was an ugly day.

A mixed bag of events for markets as some moved while others remained unchanged. The Russell 2000 made a key move lower as it broke channel support. Relative performance widened its losses as declines were logged.  The next target is the 200-day MA.