After days of small gains last week, it only took two days to undo the buying for the majority of August before longs stepped in to recover things by Friday's close. The savior for indices were key moving averages—the 50-day MAs in particular—as traders complacent after easy gains received a bit of a jolt.
This isn't a crash, nor necessarily the start of one, but we need to see what happens when indices become oversold and whether they can attract sufficient buyers to take indices out of this condition. If they can't, then the crash sirens will have more credence.
The NASDAQ saw 'sell' triggers in the MACD and -DI/+DI, but stochastics require a few more days of weakness before they can be considered bearish, let alone, oversold. However, the 50-day MA offered a picture perfect support area for Friday's low.
The S&P didn't make it down to its 50-day MA but by the time Friday's close completed it had managed to make it back to its 20-day MA.There was a MACD trigger 'sell,' but other technicals are still bullish.
The Russell 2000 (IWM) found support at its 50-day MA but the breakout is under pressure and if you are been strict, may already be reversed. There are 'sell' triggers for the MACD, On-Balance-Volume, -DI/+DI and relative performance.
The next few days of this holiday week should hopefully see some price stabilization. If we start to see drip losses back to the lows of Friday, then there will be a good chance momentum will reach the oversold conditions necessary for a crash—at that point, it will be up to buyers to step in and brings things back to their prior highs. All of this is hearsay for now, but time will tell.