The Russell 2000 ($IWM) has been guiding towards this, but the positive reaction in the Nasdaq and S&P following Friday's gains in the Small Caps index is not enough to suggest a swing low is in place for these indices. For starters, buying volume was light and momentum remained firmly oversold. The S&P did offer an opportunity at the 50% Fib retracement, and Fib zones give the best indication the decline has found a sustainable low, or at the very least, not one prone to further panic selling.

The divergence in the action between the Russell 2000 ($IWM), and the S&P and Nasdaq continues. If the Russell 2000 could go on to tag its 200-day MA, particularly if it's done on a bullish reversal candlestick, then there would be a good trade opportunity on offer here. Even a rally from here might be enough if there is a tight stop.

While it wasn't the recovery I would have liked, the Russell 2000 ($IWM) managed to resist extending its losses. The index did record a loss, and volume was confirmed as distribution, but I would be a little more optimistic going forward; albeit, a test of the 200-day MA remains favored.

Monday's selling left no doubt as to who's in control of markets. The real disappointment was how little the 50-day MA played as support given how long ago it was last tested. Instead, we are are left looking at alternative support levels for buyers to step in. The S&P moved to a net bearish technical picture after months of been net bullish. It's unclear where support may come in so I have included Fibonacci retracements as a guide. Interestingly, today's narrow range day occurred at the 61.8% retracement line, so we may see some bounce (likely, not much) tomorrow. The 38.2% zone is also near a January peak (and successful support test in February), so if there is no bounce tomorrow, then the 38.2% zone is likely next.