After three days of selling it was hardly surprising to see bulls take a peak from under the blanket. Having said that, it was all fairly tentative, with only half the volume of prior selling days. But buying is buying and there is probably more in the tank for the next couple of days, although don't be surprised if most of the gains are booked premarket, although there are only crude oil inventories and a 10-year note auction data to influence things.

The Russell 2000 (IWM) gapped higher, nearly getting to the 50-day MA before losing some ground into the close. I would look for another challenge of the 50-day MA, although it's hard to see it regain this average. Technicals are now net bearish, which means any gain from here is likely to be temporary.

The S&P is caught more in a no-mans land. It's trading between 50-day and 200-day MAs, but there is a big gap between them. As with the Russell 2000 ($IWM), technicals are net bearish, but the index is the relative out-performer (vs the Nasdaq) and is oversold on intermediate stochastics.

The Nasdaq mounted its own challenge from its 200-day MA yesterday. It finished the day up around what was once resistance in the May swing high. As with other indices, when it reached yesterday's lows it began to struggle. As the index that has lost the most ground since the July swing high there may be room for more upside, but buying volume suggest a pause is more likely. As with other indices, technicals are net bearish.

For tomorrow, I think bulls will be more cautious and I would be looking for doji or narrow range between open and close price. If, after the first hour of trading, buyers keep the pressure on, then look for a larger test of 20-day MAs, maybe by end-of-week.

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