A worse-than-expected unemployment report last Friday morning caused stocks to begin the day substantially lower, but the resilient bulls immediately stepped in, enabling the major indices to reverse into positive territory within the first thirty minutes of trading. However, bullish momentum was kept in check throughout the remainder of the day, as stocks subsequently meandered in a lazy, sideways range all the way to the closing bell. Both the S&P 500 and Nasdaq Composite advanced 0.3%, as the Dow Jones Industrial Average gained 0.2%. Small and mid-caps showed slight bearish divergence. The Russell 2000 and S&P Midcap 400 indices eased 0.1% and 0.2% respectively. With the exception of the Russell 2000 and S&P Midcap 400, both of which finished just above the middle of their intraday ranges, the main stock market indexes closed near the upper 20% of their intraday ranges.
Although stocks quickly shook off the opening weakness, market participants appeared to take a nap thereafter. Total volume in the NYSE was 17% lighter than the previous day's level, while volume in the Nasdaq eased 9%. Turnover in both exchanges was well below 50-day average levels, and volume in the Nasdaq was the slowest in nearly a month. Notably, the major indices have closed higher in each of the past five sessions, but all five of those days were accompanied by declining volume. As such, last week's gains were apparently the result of a temporary lack of selling pressure, rather than an abundance of buying interest. This is concerning because such a string of lower volume gains can easily be erased with just one day of swift institutional selling. Until we see at least a single round of higher volume gains, denoting the possible return of institutional buying, we view the long side of the market with a substantial amount of trepidation.
While scanning hundreds of ETF charts over the weekend, we observed the number of technical setups for the short side greatly outnumbered the quantity of bullish setups. Last week's gains merely caused many ETFs to bounce into resistance of their prior uptrend lines that were broken two weeks ago. Quite a few ETFs also rallied to close right at new resistance of their 50-day moving averages. The iShares DJ Transportation Avg. Index (IYT) is a good example of this: 
From October 21 through November 2, IYT got smoked, tumbling nearly 12% during that nine-day period. Furthermore, the decline that started on October 21 began at resistance of its prior high from mid-September, where a short-term "double top" was formed.
