I'm maintaining my near term "Neutral/Positive" outlook for the major equity indexes in spite of Wednesday's significant declines.
Yes, all of the indexes closed lower, with negative internals on the New York Stock Exchange and the Nasdaq as overall trading volumes rose significantly above those of the prior session. In fact, four of the large-cap indexes -- the S&P 500, the Dow Jones Industrial Average, the Nasdaq Composite and the Nasdaq 100 -- closed below their short-term uptrend lines, turning their trends to "Neutral" from "Positive."
However, no important support levels were violated, and the data continue to send a generally neutral message regarding market prospects (as has been the case for several days).
Let's check out some charts, starting with the S&P 500:
Here's the Dow industrials' chart:
And here's the Nasdaq Composite:
As noted above, all of these charts closed below their short-term uptrend lines, turning their trends to "Neutral" from "Positive." But importantly, no support levels were violated even though the day's selling pressure was notable.
Yes, all three of these charts flashed bearish stochastic-crossover signals. However, I don't think those are actionable unless an index also violates near-term support levels.
And while breaks of support would likely darken my forecast, for now, I'd say that Wednesday's selloff wasn't large enough to alter my near-term "Neutral/Positive" outlook for the stock market's major indexes.