S&P 500 (Figure 2)
Wednesday's premarket reversal picked up steam heading into the opening bell. On the 15 minute chart of the ES (S&P 500 eMini) a series of three waves of selling are visible. The first consisted of the original reaction out of the 2T. The second took place heading into the open. It found support at the 15 minute 200 sma, but by 11:30 a.m. ET a third wave was under way. The second wave of selling had been stronger than the first. This indicated increasing momentum on the trend and it's common to see a third wave that is even stronger than the second. This lasted into 12:30 ET.
Although the market continued to base along lows on the 5 minute time frame, by 12:15 ET the morning trend was extended. A 2-wave bear flag formed heading into the 5 minute 20 sma, but the larger trend exhausted prevented it from offering the typical rewards of a bear flag. Instead, the attempt only led to slightly lower lows and the market spent the remainder of the session in a trading range on the 5 minute time frame.
Nasdaq Composite (Figure 3)
The Dow Jones Industrial Average ($DJI) ended the day with a loss of 130.33 points, or 1.02%, and closed at 12,630.03 on Wednesday. Only five of the Dow's thirty index components posted a gain on the day. The top three were Intel (INTC) (+1.65%), Johnson & Johnson (JNJ) (+1.23%), and Proctor & Gamble (PG) (+0.29%). The weakest performer was Disney (DIS) (-5.44%), whose earnings were met with disappointment following Tuesday's close. It reported earnings of 49 cents a share compared to the 57 cents anticipated. Alcoa (AA) (-2.68%), Caterpillar (CAT) (-2.56%), DuPont (DD) (-2.45%), and Exxon Mobil (XOM) (-2.11%) were also at the top of the day's decliners.