Last week didn't see a particularly strong breakout in the Nasdaq but it still managed to hold the move by Friday's close. There was a small uptick in volume, but better was the supporting technical picture; in particular, relative performance against the Nasdaq and accumulation trend in On-Balance-Volume. It's also a counter move against an earlier 'bear trap'.

Buyers worked the bullish harami as a swing low with a second day of buying, this time on higher volume accumulation. Biggest winner of the lead indices was the Russell 2000, but all indices benefited. The gains in the Nasdaq counted as a breakout yesterday but volume was light. Today's gain registered as a bearish black candlestick, with the index closing below its open price. Despite the opening loss, it didn't reverse the breakout. If prices can stay above 9,400 it would complete a return to net bullish technicals with a MACD trigger 'buy'.

There was a reluctance on the part of traders to react to the bearishness of Friday' trading, although today's buying came on significantly lower volume. The 'inside day' of Monday's trading ranks as a bullish harami over the last two trading days - a bullish pattern. For the S&P, this buying didn't contribute much to arresting Friday's selling volume as many of the indices failed to recover channel support.  Relative performance remains strong (versus Small Caps) although other technicals are drifting, the MACD in particular.  Some could argue today's buying marked a return to channel support, but it's not a substantial recovery.

Friday was a return to the selling which started the week; the Monday gap down and Friday's selling bound small gains into the gap. Friday's selling also brought with it channel breaks across many of the indices. The S&P closed at its 50-day MA, at a point where the potential 'buy' signal from earlier in the week is now under pressure from a stop-out if the 50-day MA is breached. Technically, there was an acceleration in the MACD trigger 'sell' and an ADX 'sell' trigger, but offset by an acceleration in the relative performance against Small Caps.

The gap down at the start of the week is still the dominant pattern but today helped stabilize the losses. Indices did have support to work with, the Dow in particular is still trading inside its channel. The Dow has been chugging along channel support with today's buying registering as accumulation. The MACD is on a trigger 'sell' along with a 'sell' trigger in the ADX.

Well, it has been two days since the last post and yesterday's open started with a big gap down which started the day for the S&P below channel support (and the prospective buying opportunity), but has now left the Nasdaq in a possible buying opportunity. For the S&P, the gap down may have been enough for value buyers but the break effectively kills the rally and likely starts a new sideways consolidation. The MACD trigger 'sell' expanded with a new 'sell' trigger in the ADX.

Not since September of last year have we seen a selling day like Friday's. Hardest hit of the indices was the Russell 2000 as it broke below support of its rising channel. It remains above breakout support of $158s, but with new 'sell' triggers for the MACD, On-Balance-Volume and ADX. Relative performance versus the Nasdaq has been in freefall since mid-December and Friday's action didn't help. However, the weekly chart is the one to watch if you are holding long, and with 20- and 50-week MAs running closely aligned there is support to work with.