Toni Hansen writes that the 200-day simple moving averages are going to be a magnet that will attract further selling.

Toni Hansen continues to watch for a larger trading range on the daily and weekly charts with the 20- and 50-day simple moving averages serving as the strongest resistance that will need to break to force the market into a larger range.

The market continues to favor a larger range into the new week. In order to continue higher, the indices need to break some rather significant resistance with all the daily moving averages that are converging overhead.

If the indices remain weaker, then it will be easier for them to drop into the 200-period sma on the daily charts before rounding off and bouncing back higher.

The indices are holding a bias for a larger range on the 30-minute charts due to the sharper decline into the end of the day again.

Often a day like Tuesday is followed by one with stronger action back and forth that will make scalping and shorter-term daytrading more favorable.

Toni Hansen is still looking for more weakness into Tuesday, and would like to see a strong test of the 200-day moving average in the Nasdaq to really provide a more solid daily support level.

Investors are very nervous after last week's performance, which brought back flashbacks from the extreme selling that began with the new century.

Toni Hansen writes that volatility is going to remain high over the next couple of trading days.

The range on Wednesday created a base on the 30- and 60-minute charts that suggests another move lower on Thursday. If the morning economic data comes in with any shade of concern, then we can easily see another test of Tuesday's lows.