Markets were able to stage a recovery after Tuesday's losses, but the recovery - while newsworthy - didn't do enough to make back all of those losses, and critically, there is still a key "bull trap" in the S&P. Technicals are still mixed for this index, with momentum (stochastics) failing to return to an overbought condition, a condition required to sustain a rally.

Bitcoin has bigger problems. It will take much more than today's gain to reverse what had started to look like the beginning of a right-hand-base. I still think this is forming the bottom of a new base, and is an attractive 'buy' for those willing to hold for what may take a year to complete (to challenge $125K). Technicals are net bearish and should $85K be undercut, then all bullish calls are off.

The Nasdaq has managed to stage a counter rally to the breakdown, but the symmetrical triangle pattern has played out, so need to look at new support and resistance. There may still be a bulish play if this pattern plays out as a bullish ascending triangle.

On the flip side, we have a Russell 2000 with the potential to turn into a 'bearish evening star', but this would require a gap down tomorrow. But an aside from that, it's in rally mode and is a long way from any "bull trap". Technicals are net bullish.

For tomorrow, bulls can watch Bitcoin, bears can keep an eye on the potential bearish 'evening star' in the Russell 2000.

More By This Author:

"Bull Traps" For S&P, Nasdaq And Bitcoin
Russell 2000, Equal Weight S&P, And Semiconductor Index Extend Rally
Index Breakouts Hold As Bitcoin Makes A Move