Markets enjoyed a second day of gains, although volume was down on prior days. Again, with the exception of the Russell 2000, it's still all noise of swings within larger consolidations. The S&P challenged the 'bull trap' with new 'buy' triggers in the MACD and On-Balance-Volume.

It was a second rough day for indices with the Russell 2000 taking the brunt of the selling. More troubling, what should have been a god bounce off support was swept away by today's bearish engulfing pattern - made all the worse by the recent strong bounce, which has now failed.  Technicals are again net bearish for the index. Again, it will be time to look at the relationship against the 200-day MA to give us an indication as to when the indices reach historic extremes; the first such test for the Russell 2000 will be when it gets to 1,441.

Friday's action left a bitter taste in the mouth as the nascent breakouts from the pennants reversed into nasty 'bull traps'. Worst of the action was focused on the Russell 2000 which undercut the June swing low in the process. Action for this index is looking particularly troublesome as the long standing relative underperformance to peer indices continued its downward trajectory. 

With the Semiconductor Index clearing its bullish pennant it didn't take long for other indices to follow suit. The S&P managed to clear its 'pennant' consolidation a couple of days ago, but today's weak close was not exactly a ringing endorsement of strength. There was at least a fresh MACD 'buy' signal in the mix.