AT40 = 64.0% of stocks are trading above their respective 40-day moving averages (DMAs) – ended a 1-day overbought period
AT200 = 62.7% of stocks are trading above their respective 200DMAs
VIX = 11.7
Short-term Trading Call: bullish

Commentary
It figures that just one day after the stock market finally crossed into overbought territory, it dropped right back out in dramatic fashion.

The PowerShares QQQ ETF (QQQ) followed right along with the Nasdaq but came far short of challenging the previous day's intraday low or the close.

Small-caps suffered much greater damage. The iShares Russell 2000 ETF (IWM) closed below the low of the previous trading day and created a bearish engulfing pattern. The selling did not end until IWM tapped the bottom of its uptrending upper-Bollinger Band (BB) channel.