A bright start with opening gap gains were unable to follow through.  The Nasdaq gain came off its 50-day MA with a higher volume (accumulation) bounce. The gains were enough to see a 'buy' trigger in On-Balance-Volume but other technicals remain negative. However, as long as he 50-day MA holds this should be viewed as a pullback in a bullish advance.

The Nasdaq closed below its 50-day MA as the early week swing low finds itself vulnerable to an undercut and loss of support. Expectation would be for a measured move down, which given the 1,000+ point move from the 12,074 high to the swing low, would set a current target around 10,250. Technicals are net bearish with the index underperforming relative to the Russell 2000.

We had the initial phase of profit taking which took indices down to key moving averages. Yesterday saw the first attempt by buyers to recover the losses, but today's action has turned things much more bearish.  Bulls seem to be a far fewer in number than Bears which only accelerated the selling.  The Nasdaq is again back at its 50-day MA on higher volume distribution selling. Today's action has shifted the action net bearish in momentum, but not oversold. Only On-Balance-Volume is holding on to its prior April bullish trigger. Having only tested the 50-day MA for the first time since April just a couple of days ago, it's looking less likely it will be able to hold this moving average over the coming days. The 200-day MA is far below, so we could be looking at an ugly September until we get to this key long term moving average.

It was another day for sellers to pressure weak-hand longs into dumping their positions. Despite the sizable losses, most of the indices have yet to reach an oversold condition. However, there is a shift in relative performance between the indices. Losing out is the Nasdaq, it started the day at its 20-day MA but then gapped down to its 50-day MA. If the latter fails to hold then it's a long way to its 200-day MA. Stochastics are just about net bullish but it's looking likely this level won't hold. There are also 'sell' triggers in the MACD and -DI/+DI to consider. 

After days of small gains it only took two days to undo the buying for the majority of August before longs stepped in to recover things by Friday's close. The savior for indices were key moving averages - the 50-day MAs in particular - as traders complacent after easy gains received a bit of a jolt. This isn't a crash, nor necessarily the start of one, but we need to see what happens when indices become oversold and whether they can attract sufficient buyers to take indices out of this condition; if they can't, then the crash sirens will have more credence.  The Nasdaq saw 'sell' triggers in the MACD and -DI/+DI, but stochastics require a few more days of weakness before they can be considered bearish, let alone, oversold. However, the 50-day MA offered a picture perfect support area for Friday's low.

After weeks of small gains it was Large Caps in the form of the S&P and Dow Jones Industrials which both posted gains. Large Caps posted gains on higher volume accumulation with strong relative performance against Small Caps. 

It was looking like an day for sellers to take control but while it was a down day with heavy volume disstribution, there wasn't any significant point loss to go with the selling. Losses in the S&P occurred on significant volume but without any major change in supporting technicals or price. With bulls looking for a crash on any sign of weakness, it`s going to be hard to see a crash occurring as markets continue to enjoy gains on the back of overbought conditions. Crashes do not occur when markets are overbought but when they are oversold, and markets are still a long way from this.