Today's selling has started the retest of the June lows for the Nasdaq and Russell 2000 as the S&P gets rebuffed by its May low.  One point of concern is that none of the indices were able to mark a new swing high.  Nascent bullish technicals are also looking vulnerable to reversal. The index to watch is the Russell 2000.  If there is to be a recovery then the Russell 2000 has to do the leg work. Key here is that the index retains its relative outperformance to the Nasdaq and S&P - even if it suffers selling, as is likely from here. 

There is much talk of bear market rallies - which may be true - but the longer this rally continues, the more May and June buyers will be in the money.  The real rally will come when markets can make their way back past June highs as this will place all buyers for the past 2 months in the money. For the Nasdaq we have the MACD and On-Balance-Volume on 'buy' triggers as the index works an outperformance relative to the S&P.  Friday's gain has pushed the index inside its prior trading range and with a close above the 20-day MA.  The challenge is the 50-day MA. 

Despite putting in the groundwork for a swing low we are still not seeing a whole lot of demand for building a rally off the lows.  There should be nore upside in the tank, but once it reaches congestion from May I wouldn't be surprised if the rally stalls out - which would probably be enough to push the indices well out of an oversold condition.  With respect to the S&P, we had a new 'buy' trigger in On-Balance-Volume to go with the relative outperformance of the index against the Russell 2000.  

If we are going to get a swing low of consequence we are going to need days where buyers can build off opening gaps more than what was achieved today; yes, there were opening gaps - but there was little follow through higher. For the Nasdaq, the opening gap was substantial, but the resulting gains were unable to challenge the May swing lows.  On a positive front, there was a new 'buy' trigger in On-Balance-Volume to go with an acceleration in the relative peformance over the S&P.

Markets continued with the struggle between bulls and bears - with bulls taking Friday's laurels. Friday added a little something different as options expiration clouded trading volume, so it's perhaps a little early to say if we have confirmed accumulation to go with the buying.  The Nasdaq was one of the indices to chalk up big volume, but it wasn't enough to generate a new 'buy' trigger in On-Balance-Volume, although there was a new 'buy' trigger in relative performance against the S&P. 

Buyers step up to the plate and recover some of yesterday's losses, but buying volume was down on Tuesday's for some indices - and there were some losses end-of-day to keep the gains in check. I wouldn't expect much from indices tomorrow. but slow, steady gains over coming days would be good.

It was a blowout for the Nasdaq and S&P as both indices sliced through the lows of May.  It's now left to the Russell 2000 ($IWM) to cling on to support.  The latter index lost almost 5% on the day as it gapped below rising trendline support as all technicals returned net bearish.  However, relative performance to its peers continued to improve.