No real surprise yesterday to see the gains from Friday come back a little as Thursday's lows play a siren song. The most likely outcome is a consolidation pennant as prices focus off last week's lows—this might take a week to play out but the surge in volatility may see some pushback to stabilize price action.
The S&P finished just below 200-day MA as it inches back to 2,710 lows. I would be looking for more small losses or a neutral doji. The best of the action is the strong relative performance (against Small Caps) which runs contrary to price action itself.
The NASDAQ also moved away from its 200-day MA yesterday as the lows pull prices towards it. Relative performance is trying to claw back the loss but it's not there yet.
The Russell 2000 is trying to make a stand but the damage is extensive (but with more in the tank). The key loss yesterday was the undercut of the zero line in ROC—another tick in the bear market column. Relative performance is shaky, if erratic.
The Dow sits on the bullish side of the 200-day MA although technicals are not inspiring confidence.
Of the potential long plays, the Semiconductor Index is one still playing for a bounce. It may spike lower but this looks best positioned to mount a tradable rally (with an initial target of 1,380).
For today, longs can look to the Semiconductor Index but other indices may best wait for a low risk inside day (as part of a 'coil' pennant) to trade a swing play. While I think rallies look favored for indices in the short term I suspect they will struggle to maintain them when September congestion is reached.