Tuesday was not a good day for bulls, even if the most recent swing low held as support. The nature of yesterday's candlesticks was bearish with the likelihood for a follow through down particularly high.
In the case of the NASDAQ, there was a confirmed break of the 200-day MA although the index has moved into an oversold condition. The spike low of 14,630 is unlikely to hold but there is an outside chance we could see a new hammer/spike low with Wednesday finishing with a close above 14,630.
The S&P is also challenging the recent January spike low, but there is room for bulls to defend the December swing low—offering hope. Even if the latter support level is lost, then there is the 200-day MA.
The Russell 2000 (via IWM) suffered the worst of the selling. It had been hanging on to $212 support, but third (fourth) time lucky is not one we normally hear and so it proved to be the case. We are looking at a prior support level from $207.50, but with the technicals the way they are it's hard to see buyers come in to defend. With Small Caps leading lower there is a good chance the NASDAQ and S&P will follow suit.
We are now back watching the Russell 2000 for leads. The measured move target drawn in December is once again in play—this brings up a target of $193 which is looking attractive at this point. If the Russell 2000 stretches away from its current consolidation it's going to hurt and other indices are unlikely to hold their current support levels—or even the next ones down....