Daily charts show indices in a bit of a freefall, so focus shifts to weekly timeframes. The S&P was the last of the lead indices to break weekly-trend support, lining up the 200-day MA for the next support test. Volume climbed to register as distribution, rubbing salt into the wound of bulls. The only positive for bulls is that intermediate stochasics [39,1] are above the bullish mid-line, but with other technicals turning negative it's unlikely to stop the rot.

For a change it wasn't the Russell 2000 taking the bear market highlight report, but the S&P and Nasdaq instead. It was always going to be hard for indices trading near prior swing lows to hang on to those lows with the peer Russell 2000 ($IWM) was in freefall. Today saw a decisive break of the 20-day MA for the Nasdaq, with only the (generally) light volume acting as some succor, while the S&P registered a firm distribution day. Starting with the Nasdaq, the measured move target that had offered some support alongside the 200-day MA is no more. We can now start tracking the percentage loss relative to this moving average before we get to a major swing low, although a loss greater than 10% against its 200-day MA is needed before we get to a period of historic weakness greater than 90% of past price action dating back to 1971.

At this stage, only weekly time frames are important as we track "Crash Watch". It's a tricky situation as the S&P and Nasdaq don't look vulnerable, but the Russell 2000 ($IWM) is really struggling. Starting with the Nasdaq, we have a technical negative picture but it that remains above 200-day MA support. This looks like an index in the process of forming a (multi-year) trading range, but even if this is the case, it's still early days as no trading range boundaries have been set. The S&P tagged its 200-day MA, returning above this moving average after today's close. Buying volume was less than previous days selling distribution, but there are grounds for buyers to step in at a logical support level. The Russell 2000 ($IWM) did manage to post a gain today, but the candlestick was a neutral doji, not one to inspire confidence. Technicals are bearish and oversold and show little sign of a recovery. It's still early in the wee

I'll leave the chat on the daily time frames for later this week, but Friday's damage has left markets struggling on a weekly time frame. It's not all doom and gloom, but come this Friday, there will need to be some buying flourish if we are not to start looking for support dating back to the end of 2022 (or worse for the Russell 2000). The S&P is in the process of testing rising support connecting swing lows of October 2022 and May 2023. Last week's volume ranked as distribution with a new 'sell' trigger in On-Balance-Volume to go with earlier 'sell' triggers in ADX and MACD. Stocahastics are still well above the mid-line, which is perhaps the best sign that the bullish shift triggered in January of this year can continue.

A triple whammy for indices and one where bears took all the plaudits. The Russell 2000 ($IWM) experienced an ugly distribution day that drove through the prior spike low. We now have a crash opportunity that could spill into the weekly time frame. I should add, we are only 7% below the 200-day MA and Russell 2000 losses generated by crashes typically touch into a 15% loss or more against the 200-day MA. However, we are in accumulate mode, so if you are an investor, then buying Small Cap stocks should see reward in the coming years; if we get down to 20% loss against the 200-day MA, then back-up-the-truck.

It hasn't been pretty, but it has been effective as both the Nasdaq and S&P have so far managed to defend the breakouts from their September lows. Although, price has done the business, intermediate stochastics [39,1] have remained on the bearish side of their respective midlines.

It was a tricky Friday for the Russell 2000 ($IWM) as the index experienced additiional losses to take it on the verge of a new low for the decline initiated in July. The MACD is still holding to its 'buy' trigger (a weak 'buy' as it occurred below the bullish zero line), and at least volume didn't register as distribution, although that's about all you could be positive about.