The reversals in the S&P 500, Nasdaq Composite, Russell 2000 are taking hold. We believe there is more weakness from here.

We are cautious short-term as the following major indices are at either a Money Flow Unit (MFU) target or MOB target band: S&P 500, Nasdaq Composite, Russell 2000, and MidCap (MDY).

We wanted to highlight a couple of charts that are jumping out at the moment. The NDX is at a MOB target band where it has been in pause mode for the last two weeks. The SMH has broken above its short-term downtrend and may be setting up for a place to add exposure.

We got a reversal at or close to target zones on the S&P 500, Nasdaq Composite, and the Mid Cap (MDY).

The index is into a MOB target band and the mid-point of its regression trend channel as a resistance area.

We are going to keep the report short today as we want to focus on what is changing on the margin with the indices we cover and send those thoughts out as needed.

We had strong upside momentum in both the Nasdaq Composite and S&P in the last four days.

The S&P 500 and Nasdaq Composite have come down marginally from last week’s highs with the deepest pullback in the Russell 2000 and Mid-Cap (MDY). The MDY has pulled back to an ellipse buy zone, and from here, we would like to see a reversal up to confirm the buy. The pullback in the Dow Transports has been shallow, and the index is into a buy zone. As with other buy signals we are getting, we want to confirm reversal before committing new capital.

The S&P 500 is very close to our target level of 4000, which is where we would first look for a pause/pullback to occur. The Nasdaq Composite reversed off the MOB band and has now rallied back above the lower end of its channel line and 50-day average. A positive development.

The recent pullback in equities has provided a buy in the S&P 500, Russell 2000, MidCap 400 (MDY), and the Airlines. The Nasdaq Composite weakness brought the index below its regression trend channel and at an important Make or break (MOB) support band. If the index cannot reverse from this zone, there is risk of another leg lower.

The intermediate-term trends of most of the major averages reviewed remain intact. We continue to look for higher prices in most indices but realize the technology heavy Nasdaq Composite may be In a choppy range for a while.

The recent pullback in the market resulted in a number of buy signals in many indices. We have “ellipse” buy signals in the following indices: S&P 500, Nasdaq Composite, Russell 2000, MidCap (MDY), and the Semis (SMH).

Our Technical Tuesday Chart of the week - Update on TLT and three Financials we have on is 70%. The MFU-4 gets achieved 25% of the time. That is still good enough for a trade from here.

The S&P 500 is into a short-term MOB band, which may result in a pause in the index. Once this zone is cleared, we expect price to tag the 4000 target level identified by our Money Flow Unit (MFU) analysis. The Nasdaq composite is into the MFU-4 level of 14000, and we think there will be a pause in the advance. We will need to see how the index trades in this zone in the coming days to determine if it’s something more than a pause or a breakout above this level.

The uptrends in the major U.S. indices remain firmly intact. The recent pullback in the S&P 500 and Nasdaq Composite held at an important support zone, and we see the start of another leg higher from here.