Yesterday's Losses Remain Dominant

Today's action was relatively tight and held inside the range of yesterday's losses. While losses weren't great, the Russell 2000 did suffer the most of lead indices. Having said that, converged 20-day, 50-day and 200-day MAs remain support, although the MACD switched to a 'sell' trigger. Even if this support is lost the likelihood of a trading range emerging off the 1,494 swing low is still quite high.

The S&P finished with a possible bullish harami cross, with the 50-day MA lending additional support. Technicals have weakened with a new 'sell' trigger in On-Balance-Volume, but price action is the dominant watch here. If the Russell 2000 can bounce from its converged MAs, then I would look for the S&P to have a good day.

The Nasdaq also has the opportunity for a bullish harami cross although it's caught in a bit of no-mans land. Relative performance is strong-and-steady and today's volume wasn't particularly heavy, although On-Balance-Volume switched to a 'sell' trigger. Of the indices, it's perhaps the weakest in terms of predicting what it might do next.

If there is a clue to what the Nasdaq might do next it's the Semiconductor Index. The Semiconductor Index has experienced sharp gains throughout 2019 and only recently has seen this strength reverse. Technicals have moved sharply against it, with the 50-day MA looking a likely test at this point. However, while this is in decline it's unlikely we will see the Nasdaq or Nasdaq 100 mount much of a recovery.

The good news for tomorrow is that bullish harami crosses are reliable reversal patterns, and while nothing is certain the indices are well positioned for gains tomorrow. Whether something more than a short gain can emerge here will depend on what happens tomorrow.