Some pent up buying built over the weekend couldn't be sustained over the course of today and instead markets finished near their lows. It was disappointing finish to the day and a poor start for the week after a positive Friday set up. The Nasdaq gapped higher and did at least hold on to its gap by the close. However, it wasn't enough to stop a 'sell' in the MACD trigger.

There wasn't a whole lot to Friday's action, but there were some positives. First of all, the 20-day MA of the S&P successfully tested its 20-day MA on a small doji.  The Nasdaq finished on a bullish harami just above its 20-day MA. While the Russell 2000 finished on an inside day along rising support While the S&P tested its 20-day MA it also experienced 'sell' triggers in the MACD and On-Balance-Volume.

It has been a while coming, but sellers finally come out of the woodwork. When you have a series of small gains it's easy to get distracted by a large day of selling. We haven't seen a loss of support, so it's hard to say how damaging today's selling really is.  The Nasdaq lost nearly 2% but it's still a few percentage points away from its 20-day MA and breakout support. Today's volume was lighter than yesterday's, so today's selling didn't rank as confirmed distribution but still has the potential to scare. The selling reversed the relative recovery to speculative Small Caps.

It's not a foretelling of a crash, but the S&P, Nasdaq and Russell 2000 are in the 95% (99% for the Russell 2000) of price extension history from their respective 200-day MAs; these scenarios have often been followed by substantial declines and in some cases, bear markets, but a rout is not guaranteed.  Today's action of small gains is beneficial to longs and keeps the squeeze on shorts.  The Nasdaq is still underperforming against the Russell 2000 but today's buying keeps the rally ticking along regardless.