Tricky times for markets as today's trading marked a bearish pushback to Friday's late-day recovery. In the Russell 2000 (IWM), a significant gap higher was quickly undone by through-the-day selling. Technicals for the index are mixed; On-Balance-Volume and +DI/-DI are on recent 'buy' signals with stochastics above the bullish mid-line. However, the index is underperforming relative to the Nasdaq and is on a weak MACD 'sell' trigger (weak, because the signal occurred above the bullish zero line). Weakness in the Russell 2000 is worrisome because of its role in trend leadership.

The S&P had a better day than the Russell 2000, managing to close near the day's high, but closing with a bearish 'black' candlestick. There was a big volume surge that on paper looks to be bullish accumulation, but the candlestick doesn't really support this. What is important is breakout support held.

The Nasdaq is stronger than the S&P and the Russell 2000. The MACD and On-Balance-Volume is on a 'sell' trigger, but price is well above the breakout level. The Nasdaq is outperforming peer indices and is the index best positioned to gain, but it did finish with a bearish 'black' candlestick.

Indices are in a bit of a no-mands land, particularly breadth metrics that are neither overbought nor oversold. At one level, the picture has a lot in common with 2007, before the crash; but at the same time, there is a little bit of 2017 too. What is known is that bottoms occur when breadth metrics are oversold, and we are not near a bottom on this basis. It's a slow deterioration in metrics, but this doesn't necessarily mean a crash, but there is likely more downside to come.

The key will be if the S&P and Nasdaq can hold on to their breakouts. If they can, breadth metrics have room to become overbought so indices can make new highs. If not, then wait for oversold breadth metrics for a value buying opportunity.

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