Traders returned from the Memorial weekend in selling mood. Indices, already net bearish technically, suffered further losses on higher volume distribution. The S&P is on course to test its 200-day MA, although relative performance continued to accelerate against its Russell 2000, which will be a cold comfort for current longs, but may be enough to prevent losses from getting too bad.

Friday was a bit of a mixed bag. The Russell 2000 was able to defend horizontal support as it continues to build a sideways pattern. While it trades sideways it will keep other indices in check until there is a confirmed directional turn - either a break of current support (for bears) or a rally back to, then beyond 1,615 resistance. With the Russell 2000 caught inside a trading range, the breakdowns in the S&P and Nasdaq are caught in a bit of a no-mans land. As the Russell 2000 failed to break its support, both the S&P and Nasdaq are vulnerable; not just to additional losses, but also to a 'bear trap' and a rally through their respective consolidation triangles. While the Russell 2000 defending support, Semiconductors are heading in the other direction with an undercut of the 200-day MA. Further losses in this index will drag the Nasdaq and Nasdaq 100 with them. Finally, the relationship between Transports and the Dow Jones Index continued to struggl

Today's losses ranked as a breakdown of the consolidation triangle in the S&P and Nasdaq. Volume climbed to register as distribution for both indices. Technicals are already net bearish.The one caveat is the surge in relative performance of the S&P against the Russell 2000.

With Trump Trade Wars in full swing, markets were remarkably sanguine. It's still a mixed bag of bullish potential in the Russell 2000 and bearish malaise in the Semiconductor Index. Having said that, it wasn't a great day in the Russell 2000. The Russell 2000 gave back most of yesterday's gain and is set for a push below 1,521. If this happens it will set up for a new swing low and confirm a new channel trend lower.  Technicals do not inspire as it also lost relative ground against the S&P.