Bull Trap in S&P?

The week started with some profit taking which extended through to today. The only index to be negatively impacted by this was the S&P. Whether today's selling, which undercut former channel resistance to leave a 'bull trap', turns into anything significant to worry about remains to be seen. Recent trading volume has favoured buyers, with On-Balance-Volume showing very strong accumulation since August. The MACD has shown a 'sell' trigger but the 20-day MA has offered a point of support; a deeper pullback to the 50-day MA would still maintain the bullish trend so there is plenty of room for buyers to remain interested.

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The selling in the Nasdaq came back to the 20-day MA. The 20-day MA is running inside the rising channel so the selling doesn't really change anything for this index. There are 'sell' triggers for the MACD and +DI/-DI and there is distribution volume to boot but until lower channel support is broken (somewhere between 6,450 and 6,500) there isn't too much of concern here.
 

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The Russell 2000 had broken upside from what had looked to be a tight 'bull flag' but this looks to be evolving into a wider 'bull flag'. There was a new 'sell' trigger in the +DI/-DI to go with the evolving 'sell' trigger in the MACD. The index also undercut the 20-day MA. This may take a little while longer before there is a new upside break.
 

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The Dow Jones Index resisted the selling and hasn't yet broken the upward trend; it remains the most bullish of the indices.
 

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In terms of a value trade, the Nasdaq 100 might offer something for tomorrow. Today's low was close to a converged support level of psychological 6,000 support and rising channel. The index did enough to make it back to its 20-day MA which gives bulls something to work with; stops on a loss of 6,000.
 

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For tomorrow, keep an eye on the Nasdaq 100 if looking for long positions and the S&P for short positions - although the latter would only be for a short term move to channel support.