The last two weeks has been some of the most volatile trading in the last few years, but certainly not some of the worst times. The $VIX made fresh five year highs (“fear index”) recently as well.

While the daily charts of the major indexes appear fragmented and broken from a technical standpoint, the weekly charts show a contrasting picture – one of an “orderly” pullback into support which has happened two times previously in the last year.

Let’s view the indexes from the perspective of the weekly charts:

Dow Jones

The Dow is resting at support from the 20 period moving average. Last week, we saw a 450 point weekly swing in the Dow that ended only 100 points higher. It was a roller coaster ride through the week. There is a momentum divergence that has formed.

The Nasdaq

Although the Nasdaq broke its 20 period moving average, it has done so before and found support just above the rising 50 period average. It appears to have done so this week as well.

The S&P 500

The S&P weekly view is showing yet another ‘magical’ turning point at the 50 period moving average. The S&P chart is similar to the Dow, and we are seeing a similar momentum/price divergence.

The Russell 2000

The Russell 2000 is the weakest of the major American indexes (from a relative strength perspective), and has fallen over 120 points over the last three weeks. The negative momentum divergence has been developing since the beginning of 2007, and price has now violently resolved that divergence.

Quick Overview

From here, we should see price rally up over the next few weeks (or shorter time) to attempt a retest of previous price highs. This appears likely since the “Fed came to the rescue” in terms of injecting liquidity into the market.

The market doesn’t appear to be ‘out of the clear’ just yet, but perhaps from both a technical standpoint, and one of the ‘news,’ the balance may be shifting back to the buyers and calmer times – at least more calm than the last two weeks – may be returning to the market.