Once again, biggest clue Wednesday, just like Tuesday, was that S&P 500 (SPY) could not clear previous day high. Nor could DIA, QQQ or IWM. So market may be oversold, but the scenarios I have laid out for watching for a potential bottom have not come to fruition-not yet.

S&P 500 (SPY) Touched down on the EMA as it continues in oversold territory. Also filled a gap from 02/03/12.

Russell 2000 (IWM) Never gapped higher back in February. Been looking at 75.50 as next support. Oversold with no classic signs of bottoming at this time

Dow (DIA) Most promising or should I say most clarifying perhaps since this had an inside day. Really oversold daily RSI

NASDAQ 100 (QQQ) With RSIs extremely oversold, would not look to short, rather, wait to see when signs of bottoming action emerges.

GLD 148.27 last swing low 12/29/2011

XLF (Financials) Won't make a move in this until it is clear that it can close back above the 200 Weekly moving average or it cannot. 14.40 is a swing area

IBB (Biotechnology) Until it crosses 126.90, that area could wind up as triple tops. Wednesday turned out as an inside day

SMH (Semiconductors) Could not hold 32.15 so now we look at the 200 DMA

XRT (Retail) Held 59.00 with an inside day-but unless it gets back over 60.08, no reason to cheer

IYT (Transportation) I continue to watch in amazement how well 91.00 is holding.

IYR (Real Estate) Became a short under 63.00 and now sliced through the 50 DMA. 61.70 next area of support

USO (US Oil Fund) oversold and clearly getting more oversold

TBT (Ultrashort Lehman 20+ Year Treasuries) Weekly RSIs very oversold-can rates go to zero?

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Biggest clue Tuesday was that S&P 500 (SPY) could not clear previous day high. Nor could DIA or IWM. NASDAQ (QQQ) made a bold attempt with early strength from AMZN, GOOG in particular, but AAPL gave it up the last hour of the day, breaking last week's low. No phase change from warning, but certainly no sign of bottoming action either.

S&P 500 (SPY) 132.75 next support area against the exponential moving average as it continues in oversold territory

Dow (DIA) Really oversold daily RSI

NASDAQ 100 (QQQ) 63.23 is the low from March 6^th when it left a DOJI island bottom. Could well gap under but with RSIs extremely oversold, would not look to short, rather, wait to see when signs of bottoming action emerge

GLD 148.27 last swing low 12/29/2011

XLF (Financials) 14.35ish the retracement to the weekly moving average

IBB (Biotechnology) Until it crosses 126.90, that area could wind up as triple tops

SMH (Semiconductors) if 32.15 holds-then might look here for strength above 33.00

XRT (Retail) Broke the bear flag and now looking at last week's low 58.57.

IYT (Transportation) 91.00 important and still holding-sort of amazingly

IYR (Real Estate) Gave up 63.00 although still in bullish phase. Now looking at the 50 DMA 62.29

OIH (Oil Services) Daily really, really oversold-this is not where I would go for shorts right now

TBT (Ultrashort Lehman 20+ Year Treasuries) Weekly RSIs very oversold

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S&P 500 (SPY)  officially oversold on the daily indicators. Warning phase gathering momentum. Would prefer to sell rallies

Russell 2000 (IWM) Inside day meaning, in the current warning phase, should see some buying come in over today's high, but if breaks today's low, another leg down likely.

Dow (DIA) Most oversold of the indexes. Expect last swing low to hold with any rally close to 130 a likely short opportunity

NASDAQ 100 (QQQ) Inside day. Big eyes here on the way today's range breaks since a run above today's high could change the near-term outlook which for now, still looks bleak.

GLD Oversold which means have to wait for some rally before putting on a new short position

XLF (Financials) Valiantly tried to climb above 15.00 instead closing under the swing low from early April.

IBB (Biotechnology) Inside day with next underlying support at 121.65.

SMH (Semiconductors) Remains oversold with support at 32.15. Outperformed the market

XRT (Retail) Nice attempt to firm but not enough to get above the 50 DMA which means like everything, vulnerable still

IYT (Transportation) Looks double toppish with 91.00 a possible neckline

IYR (Real Estate) Got to 64.18 after I wrote over 64.20 this gets exciting. Right now, market's best hope to hold up

USO (US Oil Fund) Oversold so unless it looks like it could return back above the 200 DMA, would leave this alone

OIH (Oil Services) Inside day and still oversold with room for a good short covering rally

XLE (Energy) Inside day and looking similar to OIH

TBT (Ultrashort Lehman 20+ Year Treasuries) Watch 18.05 again

The initial weakness in the day certainly no surprise, but the real question is whether the end of day rally and hammer candle left in S&P 500, NASDAQ and the DOW is a reversal with more upside to come given the weak warning phases? Russell 2000 tested and held a major weekly moving average. The financial sector held 15.00 (XLF) and Real Estate (IYR) held 63.00 closing virtually unchanged. Volume spiked in the SPY leaving a second significant distribution day. I would have preferred the volume spike and a green close, but one thing is for sure; after testing the recent highs, now lows, market will soon prove itself much bigger one way or the other. Wednesday could be a major key as to which way.

NASDAQ 100 (QQQ) No volume spike but a hammer candle with resistance just overhead. Big eyes here before we get too excited about any rally turning out as anything more than a good sell opportunity.

GLD Short paid off with cover today as it approaches oversold. But will look for another opportunity as 155 support will not hold the next time

XLF (Financials) 15.00 swing area. Longer it holds the better the chances for the market. A failure and see a test of the weekly moving averages below

IBB (Biotechnology) Once the VRTX news runs its course, possible this has seen the highs for now. Only way to alter than bias is if the recent highs are taken out

SMH (Semiconductors) Oversold and got close enough to 32.00 to assume a bounce to 34.00 very possible

XRT (Retail) If the market can rally, this has to come along or rather start leading again. That means a move back over 61.25 or trouble still lurks

IYR (Real Estate) Over 64.20 and this gets exciting

USO (US Oil Fund) Looks better Over the 200 DMA

XLE (Energy) 69.45 overhead resistance

TBT (Ultrashort Lehman 20+ Year Treasuries) Watch 18.05

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Today, Thursday, was another example of how a good gap down is the often the best way to prevent a down day. As you may recall the market did NOT gap down, and that's exactly my point from yesterday. Today, the markets opened quietly unchanged and then, depending on the index, drifted higher or lower until more bad economic data hit the tape at 10:00.

With bad news from the ISM weighing on trader sentiment, and no early gap to satisfy the bears and/or feed the bulls, the market began a slide which it would spend the rest of the day helplessly attempting to reverse.

The weakest of the market watch indexes, IWM, suffered the worst falling 1.55% vs. a mere .45% decline in the DIA. In the end, 3 of the 4 remained in their bull phase and all four closed within the boundaries of their consolidation ranges. However, it is noteworthy that they are all at the bottom of their trading range as we go into the news they've all been waiting for...

Friday is the big day. Jobs data reported at 8:30 will drive the direction of the markets. With all the bad news the market has received this week it seem unlikely that the jobs data will be surprisingly good.

But which way will the market go if the report it better or worse than expected?

As always I'll let the location of the opening range and its subsequent price action guide our trading. Subs, you'll see in today's stock picks that I've prepared you for a market that is disappointed or positively surprised. However, don't let the actual news distort your interpretation of the market's message!

For example, I will not be surprised if the jobs data comes in "as expected" and the market rallies. Worse than expected, I'd expect a big down open which may or may not follow through. With a better than expected report I'd expect a big up open, but I'm not sure the gap will not be sold leading to a disappointing day for the bulls.

I don't know how the news will move the market, but I do know that the market will quickly tell us what it thinks of the news, and that is more important than what we think of the news. Listen carefully to the market.

Since this particular jobs data announcement creates an incredible number of potential outcomes for each of the ETF's we usually cover in this report, I will only cover the four major stock in index ETF's.

My ETF comments are based on the following logic. If the market is trading above its 30-minute opening range I will have a bullish bias, and below the 30-minute opening range I'll have a bearish bias. In addition to that intra-day bias, I will give the market another weighting on my bias based on where the market is trading within the context of the daily chart.

Below are my price levels for being bullish or bearish. If the market is not beyond either a bullish or bearish level then I'm neutral.

There's nothing better to ferret out the resolve for the bulls and frustrate the bears than a divergent gap down in the major indexes. The divergence was the fact that the QQQ and IWM gapped below their prior day low while the SPY and DIA did not. The result of such a condition is often that the bigger trend (the phase) wins. On Wednesday, that meant a choppy upward bias after a weak gap lower open.

Sure there were good reasons to gap lower, ADP Payroll numbers were disappointing, Spain's markets were sinking, and the U-turn pattern from Tuesday needed one last push lower. But the Dow and SPY refused to breakdown, and Opening Range reversal patterns gave us a clear indication that it the gap had flushed the bearish sentiment for the day.

The bigger picture, however, is that the market is waiting for Friday's employment numbers. Three of the last four day's have been more consolidation than trend and even the trend day (Tuesday) reversed. So I expect more of the same for Thursday - the 5 day range will likely define Thursday's price boundaries.

All four market watch have their own version of the same pattern that has been building for the last 5 days - a new bullish phase breaking out over a prior swing high and consolidating in a new range.

S&P 500 (SPY) Bottomed pennies from the 139.49 level suggest as support yesterday making this an extremely pivotal area now. The range to focus on is 139.40 as support and resistance at 140.79 and then at 141.66.

Russell 2000 (IWM) Continues to straddle the 50 DMA. The range to focus on is 80.50 to 82.50 and 83.

Dow (DIA) The one to be long when market rally and the only one to have and inside day. The range to focus on is 131.40 to 132.70 and then 133.14.

NASDAQ 100 (QQQ) Holding firm over its 50 DMA and trend line from the highs, but still below important daily resistance level of 67.50. The range to focus on is 66.00 to 67.63.

GLD Consolidating in a base in a bearish phase. Wait for a compelling pattern.

XLF (Financials) Right back into it's own 5 day pattern similar to the one described for the major indexes above.

IBB (Biotechnology) A nice strong inside day. There is a lot of support  at 124 now (just below its daily low), and with 3 days of consolidation it could be ready to move higher again

SMH (Semiconductors) Straddling the 50 DMA like the Q's but closed near the top of the 4 day range. If it moves higher it may trend up, but 35.25-25.33 is big resistance.

XRT (Retail) A nice strong inside day. There is a lot of support  at the 61.30 area now, and with 3 days of consolidation it could be ready to move higher again. 63.00 is a major daily breakout if it can do it.

IYT (Transportation) Nice follow through of Tuesday's good breakout of the wedge on the daily chart from the lows in Feb. and the highs in March. Let's see if it can hold above 95. This ETF could surprise traders to the upside.

IYR (Real Estate) Has had a nice move up. Now has an inside day. 63.81 is a pivotal area.

OIH (Oil Services) Quietly consolidated at a good support level on the daily chart, but remember it is in a bear phase and came off the 50 and 200 DMA on Tues. Be careful of weakness.

XLE (Energy) Quietly consolidated after a nice run up to the 50 DMA consoldation is what the bulls need as it is stuck between the 200 and 50 DMAs

TBT (Ultrashort Lehman 20+ Year Treasuries) Stuck in a range which may give it has a good base to move higher from, but with jobs data due out Friday, I'll stay away.