Sellers Press Their Advantage But Buyers Hold Long Term Advantage

Whatever hope bulls were hanging on to was quickly quashed by yesterday's gap down and today's trading different bail them out. 

The Nasdaq did a little better by closing with a (potential reversal) inside day. A gap higher would offer the possibility for a bullish morning star - not to be discounted as a trading opportunity.No surprise to see technicals net bearish with momentum oversold.

The S&P also closed with an 'inside day', although today's candlestick is more neutral than that for the Nasdaq. On the plus side, the S&P is significantly outperforming the Russell 2000, although long term - I would be happier if this was the other way around.

The Russell 2000 had the most bullish candlestick of the lead indices today. Unfortunately, it delivered a downtick in relative performance against the Nasdaq. However, the index retains the potential to surprise. One thing to notice is the trend in On-Balance-Volume has flattened since February, so I'm not sure the losses we are seeing since April's 'bull trap' reflects big money selling; more likely is stealth buying to hoodwink retail stockholders to sell. Seller beware. 

Action in the indices doesn't look great, but we are closer to a bottom than many would be prepared to accept. Remember, bottoms are easier to spot in hindsight, but if you are an investor with a buy-and-hold mentality, then back up the truck - you need to be a buyer here.