These big reaction moves always seem to happen when I'm afk. Anyway, markets are attempting to price what impact the Coronoavirus will have in both the short term and long term, but after 10% declines we now have the dead cat bounce effect. I don't expect the bounce to last with a retest of recent lows likely, but this test could evolve into a slow decline - with buyers reluctant to step in until the impact of world events can be priced in, which is easily a few months away and potentially longer.  If you are looking for an exit, then the next couple of days could be critical. It's hard to see indices make it back to multiyear highs without a containment in the Coronavirus outbreak, so today's bounce seems artificial. The Dow Jones Index added 5% as it accelerates toward its 200-day MA on net bearish technicals. Relative performance remains poor (vs the Nasdaq 100) and until there is a relative advantage it's hard to see it sustaining a strong run higher.

The S&P gapped lower out of its rising channel, following the Dow Industrial Average in its channel break on Friday. The gap pushed below 50-day and 20-day MAs, but it hasn't yet triggered a 'sell' signal in On-Balance-Volume on higher volume distribution.

The Dow Jones Industrial Average fell outside of its rising channel and into challenging the January 'bear trap'. It's the first of the lead indices to fall outside of its rising channel. Volume climbed to register as distribution with a MACD trigger 'sell', On-Balance-Volume 'sell', and ADX is on a 'sell' trigger. Relative performance remains very weak.

Volume has eased since markets broke clear of resistance to new all-time highs. The S&P did enough to tag both breakout support and its 20-day MA as part of today's correction. Technicals are all positive although +DI/-DI is on the verge of a bearish crossover.

Between's Apple disappointing sale guidance, HSBC's 35,000 employee layoff plan, and lingering Coronavirus, it was looking like markets were heading towards a clear downward session - but this was not the case. Instead, there was a large degree of indecision as existing holders were reluctant to sell but few buyers were willing to step in to defend these elevated prices. On a pure technical view, markets look well positioned for further gains, the Russell 2000 in particular, but the Coronavirus  hasn't yet revealed its full impact on economic supply chains or consumer confidence. The key trigger (for me) remains the Russell 2000. The channel breakout remains valid, even if the index hasn't yet blown past 52-week highs. Technicals are good, although On-Balance-Volume is on the verge of a 'sell' trigger. Relative market performance remains very poor and is a long way from a new 'buy' trigger.

There wasn't a whole lot to Friday's action, but the one thing which was important was the successful defense of the Russell 2000 channel breakout. As a bonus, the Nasdaq is running alongside channel resistance and is ready to accelerate higher. The S&P is caught in the middle of its channel and Friday's action didn't change anything. The Thursday breakout in the Russell 2000 gave up nearly 0.5%, but didn't reverse any of the earlier bullish technical picture.

The S&P extended its move above 3,330 resistance on higher volume accumulation. There is still room to run to channel resistance on net bullish technicals.