Nasdaq Losses Accelerate

The potential 'bear traps' quickly stalled and sellers again returned to the fore. Selling in the Nasdaq undercut the lows of the 'bear trap' with a finish on the low of the day. There was also a 'sell' trigger in On-Balance-Volume. The wide intraday bar marks a change in the action since the beginning of this rally in November and today's volume marked a return to distribution.

There was a similar sell off in the S&P, although there was no undercut of the swing low. It finished the day on the 50-day MA with well-established sell triggers for the MACD, On-Balance-Volume, and ADX. Only stochastics are bullish, but while not overbought they are someway from the mid-line - further selling likely. The index still has yet to outperform the Russell 2000, but there is a migration away from Small Caps to Large Cap stocks

Of the Russell 2000, it still clings to trendline support and what amounted to a relatively quiet day for the index (unlike for the S&P) with an intraday range typical of what's happened before. Despite this recent trading volumes has strongly sided with bears and On-Balance-Volume is in freefall. 

Action in the Nasdaq has directed itself towards a period of more sustained selling, although the Russell 2000 remains in denial. None of this is unusual for a rally of this maturity (in the context of its run from November), so it's more of a question as to where swing lows may be established; for the S&P and Russell 2000, this is likely to be mid-line stochastics, although the Nasdaq may instead turn oversold before it reaches its low.