Good Morning, Traders. Slight gap up in the markets yesterday, which quickly turned to one of the slowest sessions all month and eventually disintegrated into more selling at the close to push the Dow down another 77.32 points, the S&P down 8.51 and the Nasdaq 15.48. It should be noted here that in trading there is an adage that goes "amateurs rule the open and professionals rule the close." This basically implies that retail money is more active during the first half hour of the day, and the "smarter" money waits it out a bit before putting positions in. Well, any way you slice it, the smart money is selling here. We have moved lower into the close for two straight days and any indication of a near-term bounce is still not imminent, no matter how oversold we may appear. This is an area where primary trends of the major averages are starting to turn from up to down and shorts should be left to run. More than likely, it is NOT a pivot where new short positions should be initiated. The market will bounce eventually (when it's ready to), and then the key will be to analyze this bounce both internally and externally to figure out its strength. In yesterday's commentary, we offered a weekly S&P chart with the message that we still had room to the downside in the benchmark index before support. Thursday's price action certainly confirmed that, as we moved down another 8 1/2 points and are moving closer to the weekly trendline support where we'll reassess the situation then. Overall bias in the Nasdaq is confirmed to down at this point with the S&P and Dow still holding as up.

Peter Reznicek is the Chief Equity Strategist and a principal of the Prana Fund, a domestic hedge fund, and ShadowTrader, a subsidiary of thinkorswim which provides coaching and education to its clients on both intraday and swing trading of equities. For a free trial to the full version of The Big Picture or to learn about ShadowTrader's other services, visit shadowtrader.net or send an email to preznicek@shadowtrader.net.