Turnover was mixed. Total volume in the NYSE rose 7% above the previous day's level, but volume in the Nasdaq eased 1%. The higher volume selling in the NYSE caused the S&P 500 to register a bearish "distribution day," the second in a week. The Nasdaq narrowly avoided having the same label. Market internals were worse in the NYSE, where declining volume exceeded advancing volume by a margin of 4 to 1. The Nasdaq adv/dec volume ratio was negative by just 2 to 1.

As commodities continue to get hammered, the U.S. dollar continues to strengthen. Yesterday, the euro fell below a five-month base of support, versus the U.S. dollar. This enabled our long position in the PowerShares U.S. Dollar Index (UUP) to break out and close above its 200-day moving average for the first time in about a year. UUP also broke out above its primary downtrend line, indicating a serious change of long-term bias for the dollar. The UUP breakout above its long-term downtrend line is shown on the weekly chart below:

Yesterday's sell-off came right as the S&P 500 and Dow Jones Industrial Average tested key resistance of their "swing highs" from July 23. When the major indices approach such obvious and pivotal areas of resistance, it's not uncommon for stocks to "shake out the weak hands" by giving the appearance that the rally attempt is dead. However, the daily charts of the S&P and Dow show that yesterday's sell-off was not damaging on a technical level. In fact, both indexes merely pulled back to support of their intermediate-term uptrend lines. This is shown on the daily charts of the S&P and Dow below: