February 28th: Fifty day MAs held as resistance with small caps [Russell 2000] and large caps [Dow and S&P] falling away as the semiconductor index handed back its Wednesday 50-day MA break. The good news for bulls was the partial relief of some overbought conditions and the lower selling volume - a good sign bears weren't interested in participating. Looking at the S&P there have been 8 accumulation days to 2 distribution days since the January bottom. Even the NASDAQ registered 8 accumulation to 3 distribution days since it made its January low. Friday probably won't deliver much, although a retest of the previous Friday's lows would look to be the best bet in the short term.

Target hit: None

Stop hit:. None

February 27th: The market is playing a game of shuffle board; it gets as close as it can to resistance, without actually falling into the gully (aka breaking through). Large caps [Dow and S&P] did look to have a measure of their 50-day MAs at one stage, but in the end the 50-day MA remained resistance for the S&P and was the final closing point for the Dow. In an almost repeat of yesterday, the Russell 2000 finished on a 'spinning top' doji after a second touch of its 50-day MA. The NASDAQ and NASDAQ 100 made modest gains, but the semiconductor index had the best of the day and is fast approaching its 50-day MA, something neither NASDAQ nor NASDAQ 100 look like doing soon. The major change on the day was the net bullish shift of technicals for the S&P and Russell 2000.

Should the Russell 2000 and semiconductor index push past their 50-day MAs I would expect the other indices to tag along behind. Both of these indices are very close to making this important break. Also working in tech market's favor is the continued improvement in the Nasdaq market internals [$NASI, $NAA50R and $BPCOMPQ]. The Nasdaq Percentage of Stocks above the 50-day MA ($NAA50R) cleared February highs and is likely to clear December reaction highs when the NASDAQ was trading around 2,700, some 350 points above where it is now. Don't discount this indicator, with 40% of stocks trading above their 50-day MAs this is not an index caught in the quagmire of a major bear maket - particularly as a few as 15% of NASDAQ stocks were above their 50-day MA at the end of January. Today was a bad news day, but the market held - this is bullish in itself. If you were/are a bear you would have been disappointed with Wednesday's action. Now, can the 50-day MAs break?

Target hit: None

Stop hit:. None

February 26th: Another decent day for the markets, but it all felt a little lacking - probably a consequence of nearby 50-day MAs as resistance for large and small cap indices. Volume climbed to register an accumulation day for the NASDAQ and NASDAQ 100, but large caps [Dow and S&P] didn't partake in the higher volume buying. However, both the Dow and S&P put some distance from the most recent reaction high - but as yet, not the most recent reaction high. The Russell 2000 lost the most of its intraday gains as its 50-day MA brought sellers in. The semiconductor index added close to 2%, but was contained by converged resistance from January-February and double December highs. How will Bernanke's comments later on during the week affect these markets? Any positive reaction to his comments would likely end the chance for a retest of January lows and lead to more active trading on the buy side.

Target hit: None

Stop hit:. None

February 25th: Decent enough gains, but no volume to back the buying. Best of the indices were large caps [Dow and S&P] as recent reaction February highs were taken out in combination with bullish crosses in the on-balance-volume trigger lines. Similar bullish crosses in on-balance-volume were found with the tech indices [NASDAQ and NASDAQ 100], but as before, there was no close above the 20-day MAs. There was a bullish cross of the 20-day MA for the Russell 2000 and it is well placed for a challenge of its 50-day MA. If this index can find the impetus to break above the 50-day MA I would expect the other leading indices to follow suit. Its relative leadership over tech indices is substantial, which highlights its importance as a market leader. Unfortunately, the semiconductor index couldn't match small cap momentum, and finished the day trapped by its 20-day MA - much like tech indices [NASDAQ and NASDAQ 100]. A decent follow through day is needed to consign this correction to history.

Target hit: None

Stop hit: APP nicked its stop, but still looks okay. However, the play registers as a 3% loss.

February 23rd: Once again it was a day of volatility for the markets, with a final close which left little change on the table for any of the indices. Volume climbed for the tech averages [NASDAQ and NASDAQ 100], but neither closed above their 20-day MAs. The same could be said of the semiconductors, with Friday's doji following that of Thursday's. Large caps [Dow and S&P] did enough to finish the day on bullish piercing patterns, but the strength of these patterns were weakened by the neutral position of stochastics. Neither large cap 20-day MA was breached either. Nasdaq market internals [$NASI, $NAA50R and $BPCOMPQ] are close to generating bearish crosses of their 5-day EMAs, but for now all are bullish. As for the Ticker Sense Blogger Sentiment Poll (30-day S&P outlook I hold to my bullish call. The only point of note was the ever rapidly falling 50-day MAs which will soon meet up with their respective indices, generating the next important test.

Target hit: None

Stop hit: OFIX dropped like a stone as it lost 29% on Friday. The February 13th pick registered as a 4% loss.

February 21st: If one was to only look at the closing price the last few days would look pretty boring. When you factor in the intraday range it takes on a totally different complexion. Not to harp on, but the 20-day MAs are still key for the indices, none of which closed above this average. The biggest shift came from the Russell 2000 with its large bearish engulfing pattern, but bearish candlestick combinations occurred across the indices. Relative strength saw two changes; the gain of large caps over small caps {Large caps > Small caps > Tech}, a bearish development, and semiconductors over the NASDAQ 100, a bullish development.

Bears put a big dent into Wednesday's gains to the extent they are in the ascendancy once more. The tight range over the past few days will break big and sharp - what will be the catalyst for this change? And when they break, which way will they go? Should they break downwards I would look for January lows to hold. If they push higher a test and break of the 50-day MAs would look logical.

Target hit: None

Stop hit: None

February 20th: The 20-day MAs remain the battle ground. Respectable gains on higher volume for tech averages [NASDAQ and NASDAQ 100] and semiconductors weren't enough to return these indices above their respective 20-day MAs. Large caps [Dow and S&P] continued to work more solid support on their own 20-day MAs. The Russell 2000 did likewise. There were no major changes to supporting technicals and Nasdaq market internals [$NASI, $NAA50R and $BPCOMPQ] kept with prior upward trends - the bullish divergences clearly apparent in all three breadth indicators. What bulls need is some solid follow through to halt what has often felt like one step forward, two steps back. Thursday would be a good time to turn the screw.

Target hit: None

Stop hit: None

February 19th: A story of two halves; a big morning bullish gap and an early afternoon drop. Volume fell, which may come back to bite bulls in the butt if such declines continue without some form of capitulation. On the flip side, the lack of volume may represent sellers exhaustion, which would be bullish. It is not surprising to see such disinterest with fresh short positions risky at such oversold levels, but new longs pressured by overhead supply. The 20-day MAs still look to be important support levels, particularly for large caps [Dow and S&P]. The 20-day MAs had already given way for tech averages [NASDAQ and NASDAQ 100] and although Tuesday opened above this average before afternoon selling left these indices below it. Small caps [Russell 2000] did enough to hold its 20-day MA.

Technicals are mixed; all indices show MACD trigger 'buys' (but none of these signals triggered above the bullish zero line), while on-balance-volume, stochastics and directional index are firmly bearish. Positive results from Hewlett Packard will probably help Wednesday morning. So it will likely be down to the 20-day MAs as to whether indices will see this average as support or resistance.

Target hit: None

Stop hit: None

February 16th: For an options expiration day the trading volume was relatively light. Volume for the past week was well below the capitulation volume of January and reflects action typical of a solid bottom retest. However, the long (President) weekend may have contributed to the lackluster Friday and a better picture will be known on Tuesday. The tight intraday range probably reflected the lack of interest on the part of traders. The NASDAQ and NASDAQ 100 finished below their 20-day MAs. Large caps [Dow and S&P] and small caps [Russell 2000] did enough to stay above theirs. The semiconductor index took the brunt of the selling, losing close to 2%. What happens over the next few days for this index will say much about the status of the January lows for the tech averages [NASDAQ and NASDAQ 100]. On the relative strength front, the NASDAQ 100 took the leadership role from the semiconductor index - not good news if you are a bull. Neither was the new leadership of large caps {Large caps > Small caps > Tech}. The change in relative strength was perhaps the biggest news for Friday.

Nasdaq market internals [$NASI, $NAA50R and $BPCOMPQ] took a slight turn for the worse with a bearish cross of the 5-day EMA for the Nasdaq Percentage of Stocks above the 50-day MA ($NAA50R). However, bullish divergences in this internal were left unchanged. There was modest weakness in the $BPCOMPQ but a small gain in the $NASI. Based on the position of market internals I have kept a with a bullish call for the Ticker Sense Blogger Sentiment Poll (30-day S&P outlook.

Target hit: None

Stop hit: QSII failed in its second attempt to get past its 200-day MA. The February 7th Stock Breakout closed for a 7% loss. SXE didn't make it past a day. The Subscriber pick closed for a 2% loss.

February 14th: Heavier volume selling swung things back into the bears court. The 20-day MAs returned as the battle zone, with tech averages [NASDAQ and NASDAQ 100] along with the semiconductor index closing just below this average, while large caps [Dow and S&P] and small caps [Russell 2000] remained above it. Disappointing was the failure of the indices to challenge February highs and it will be up to the Nasdaq market internals [$NASI, $NAA50R and $BPCOMPQ] to hold their 'buy' triggers if nothing worse is to follow. Today's weakness does not change the strong bullish divergences currently in place for the Nasdaq market internals [$NASI, $NAA50R and $BPCOMPQ].

Target hit: None

Stop hit: None

February 13th: The 20-day MAs became the first scalp for bulls. Volume did measure as a (modest) accumulation day, negating Tuesday's distribution day. Last week's gaps for the NASDAQ and NASDAQ 100 are the next challenge on the menu for tech indices. The leading Russell 2000, which was able to nudge a break of its 20-day MA yesterday, now has the 50-day MA only some 10 points away. Again, if the Russell 2000 breaks its 50-day MA I would expect the other averages to follow suit. Large cap [Dow and S&P] have a little further to run before they get to their 50-day MAs, with the tech averages (NASDAQ and NASDAQ 100) the furthest away. However, the semiconductor index may help the latter indices as it closed 6% off its 50-day MA. The other area running in tech's favor is the relative leadership of semiconductors over the NASDAQ 100 - a leading indicator of strength. This positive relationship has been running since mid-January. Wednesday wasn't volatile, but the day swung back towards the bulls a little.

As I have noted on my blog, the bullish divergences in the Nasdaq market internals [$NASI, $NAA50R and $BPCOMPQ] are pronounced and together are unlikely to be a false signal. Based on such divergences I would expect challenges of the 50-day MAs for the NASDAQ and other indices.

Target hit: None

Stop hit: RJA hit its stop as it works an attempt at the 20-day MA. The February 11th Subscriber pick closed for a 5% loss.

February 12th: The 20-day MAs proved to be the expected stumbling block for the indices. Volume climbed in line with a distribution day - questioning some of the recent gains by bulls. Both the NASDAQ and NASDAQ 100 reversed off their 20-day MAs to close slightly lower. The Dow and S&P went the other way and closed higher, but neither could pull away from their 20-day MAs. The Russell 2000 which had started at its 20-day MA was able to make a modestly higher close, but not before it had lost much of its early morning gains. Like the tech averages, the semiconductor index finished lower as it too reversed from its 20-day MA. Tomorrow is a critical day for bulls, but the bears look to be building an attack. Given the tight trading over the last few days the scene is set for a volatile session.

Target hit: None

Stop hit: None

February 11th: Another Ho-Hum day for the markets. The index which showed some life was the semiconductor index, but this from the only index to mount a true test of January lows. Bulls will take some comfort from the continued action at the 20-day MA for the Russell 2000. This moving average has yet to be challenged for the other indices - only the semiconductor index sits close to a 20-day MA challenge. At the time of writing Nasdaq market internals [$NASI, $NAA50R and $BPCOMPQ] were not updated. I still favor a test of last Tuesday's gaps.

Target hit: None

Stop hit: KAD clipped its stop on its intraday range to fail to get out of the gates. The play registers as a 16% loss.

February 9th: A disappointing lack of follow through from bulls, on significantly lighter volume, undermined some of the prior day's work made by them. Having said that, Tuesday's gap downs are likely to be filled - even if bears maintain control of the larger picture. There was some technical improvement in the indices; there was a bullish cross of the 20-day MA trigger line of on-balance-volume for the NASDAQ and a MACD trigger 'buy' plus a switch back to accumulation for on-balance-volume in the NASDAQ 100. There was no great change in the semiconductor index as it worked on forming a double bottom - the first of the indices to re-test January lows. Large caps [Dow and S&P] spent a third day on quiet action, but neither have yet to mount a reasonable challenge of January lows. Small caps (Russell 2000) hold on to their leadership role with a challenge of the 20-day MA. If this can break through early next week it will set up a greater likelihood for the other indices to follow suit.

Nasdaq market internals [$NASI, $NAA50R and $BPCOMPQ] maintained their status quo from Thursday; the Percentage of Nasdaq Stocks above the 50-day MA ($NAA50R) is the only Nasdaq internal to trade below its 5-day EMA and signal bearish weakness. However, bullish divergences in its MACD trigger line and Ultimate Oscillator remain firm.

In summary, watch for further upside early next week as Tuesday gap downs are challenged and filled. This should coincide with a challenge of the 20-day MAs. If the Russell 2000 can break above its 20-day MA, then I expect large [Dow and S&P] and tech [NASDAQ and NASDAQ 100] indices to follow suit. Bears will be looking for a break of January lows and the index most likely to lead this will be the semiconductor index.

Target hit: None

Stop hit: None

February 7th: Bulls made a better stand as morning weakness gave way to some decent buying before sellers returned at their usual time slot. The NASDAQ 100 found support at the open range of January lows, but technicals turned weaker with reversals of the 'buy' triggers for the MACD and on-balance-volume. I suspect the MACD signal will quickly return to the upside, but on-balance-volume may take a little longer. The NASDAQ gained in similar fashion to the NASDAQ 100, but its rally started from no natural support level. The semiconductor index fell between both stools with a bullish doji. The Russell 2000 had the strongest day with its confirmed bullish piercing pattern. Small caps are playing the leadership role very well with marked strength over large caps and tech averages - this will help the broader indices work higher. Large caps [Dow and S&P] posted respectable if not unspectacular returns for the day.

Nasdaq market internals [$NASI, $NAA50R and $BPCOMPQ] are having to contend with increased bearish pressure on their 5-day EMAs. However, bullish divergences between technicals of the Nasdaq Summation Index ($NASI) and Nasdaq Percentage of Stocks above the 50-day MA ($NAA50R) point to good long term bullish conditions.

Target hit: None

Stop hit: None

February 6th: An afternoon rollover undid the good work done by bulls during morning trading. Volume eased again, which after the heavy selling of mid-January is probably not a bad thing. Some may prefer another volume spike, but I think the lighter volume has more in common with seller's exhaustion than seller's apathy. The test of January lows will either confirm or deny this fact. Nasdaq market internals [$NASI, $NAA50R and $BPCOMPQ] will be key to bottom confirmation if 5-day EMAs can hold. The Nasdaq Percent of Stocks above the 50-day MA ($NAA50R) pushed a bearish cross of its 5-day EMA, the first chink in the 'January is the bottom' argument.

The NASDAQ 100 suffered the largest loss on the day and looks set to be the first index to test January lows. This time, the Russell 2000 will not be leading the pack down, and this is bullish. Although it did break rising support from January lows. However, the semiconductor index is doing it best to stay King-of-the-Losers with a 2%+ (closer to 3%) drop which turned last Friday's buying into a bull trap. January lows are next for this index. Large caps [Dow and S&P] had a relatively quiet day.

Target hit: None

Stop hit: None

February 5th: Trader's made up for yesterday's quiet trading. Indices experienced broad losses on higher volume, but given the extent of the declines the volume was not excessive. There was a common theme tonight which followed three points: [1] Bull traps, [2] Breaks of support, and [3] Return of distribution (bearish cross of on-balance-volume trigger line). The NASDAQ and NASDAQ 100 lost August support and ascending support from January lows. It was the same story for large caps [Dow and S&P]. A retest of January lows looks likely for these four indices. The Russell 2000 was at least able to hold ascending support from January lows along with its 20-day MA. But this was a leading index to the downside, so the question is can it lead to the upside? I expect a move back to January lows is needed for all indices before they can push higher. Finally, the semiconductor index gave up all of its goodwill and lost the gains from Friday. This is a tricky time for the index as technicals are in the early stages of recovery and vulnerable to fresh selling.

Nasdaq market internals [$NASI, $NAA50R and $BPCOMPQ] haven't updated to reflect Tuesday's action but the watch points are the 5-day EMAs. If these can hold following their earlier (bullish) crosses then the current decline is a pullback and not a continuation of the broader decline. There is plenty of downside room before January lows are tested so it is a little early for bears to be calling a victory - but it could be a rough ride for bulls from here.

Target hit: None

Stop hit: THI gave up its 200-day MA as it failed to break resistance. The February 4th Subscriber pick closed for a 3% loss.

February 4th: A Superbowl hangover kept Monday's trading very light. Although the late hour kept me sober I was happy to scoop a 9/2 return on the Giants win, but I would have been happier if the 40/1 shot on a draw paid off first (if only the Patriots attempted that field goal on 4th and 13 in Q3!). The postgame volume was some of the lightest seen in recent weeks, matching that of the Christmas holiday. So it is best not to read too much into Monday's action. There was no technical change for any of the indices. Markets should be back to normal by Tuesday.

Target hit: None

Stop hit: TSRA drifted back to its 200-day MA, but the stop I had set was just above this moving average - therefore the Subscriber pick for today registered as an 8% loss

February 1st: Although Friday saw the eventual upside break of August lows for the NASDAQ and NASDAQ 100, it was the semiconductor index which stole the limelight; its almost 6% gain was the first good news for this index in a considerable time. Volume climbed to register a firm accumulation day for the tech averages (NASDAQ and NASDAQ 100), as announced MSFT plans to acquire YHOO which helped offset the disappointing earnings from GOOG. Large caps (Dow and S&P) continued their good form from Thursday as the Russell 2000 fast approached its 50-day MA. It would look to be a toss up between the Russell 2000 and the semiconductor index as to which index will get their first, but the fact these two indices are leading the way is good news for bulls.

Nasdaq market internals [$NASI, $NAA50R and $BPCOMPQ] continued their improvement. Technicals of the Nasdaq Bullish Percent Index ($BPCOMPQ) all finished in the green - following that of the Percentage of Stocks above the 50-day MAs ($NAA50R) last week. This keeps the developing bull rally ticking over nicely.

Target hit: None

Stop hit: None

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