Yesterday, the S&P lost a key level of support and as a result a lower low has been established. It appears likely that this broad market index is now headed for its 200-day moving average.

With the S&P 500 losing ground for five weeks now, Deron Wagner will be inclined to take profits quickly in the event of a sharp gap down/selloff on Monday.

Deron Wagner remains concerned over the market's ability to hold support at the current levels and continues to suggest caution on the long side of the market.

Given yesterday's wild price action, Deron Wagner reviews his recent short trade in IWM as a learning experience.

With yesterday's sharp price move in the market, several short-term momentum indicators suggest the market may be close to an overbought state.

The major indices are at key resistance levels. The DJIA is currently exhibiting the most relative weakness as it has been unable to reclaim its 20-day EMA.

The broad market is now approaching resistance. An overcut or undercut formation will likely provide an important clue to the next move in the market.

The market rebounded solidly from its oversold condition yesterday. Nonetheless, the major averages have a lot of work to do in order to repair the damage inflicted on the market on May 23.

The broad market continues to struggle. It is noteworthy that both bank and international ETF's are being met with stiff resistance.

Yesterday's gap down places even more weight on an already heavy market. A significant distribution day will increase the potential for a sizeable correction in the broad market.