To say the least it was an extremely ugly day and a very negative way to start to the week. With Lehman (LEH) declaring bankruptcy, AIG (AIG) seeking funding and Merrill Lynch (ML) being acquired, the markets tanked at the opening, then had a very sharp snapback rally that took back about three-quarters of the losses on the Nasdaq 100 and about half the losses on the S&P. They backed and filled for the rest of the morning in a bear wedge type fashion, and when those wedges broke around mid-session they ended up stair-stepping lower in a 5-wave decline that took them sharply lower. A late sell-off at the end of the day blasted the indices lower into the close.

Net on the day the Dow was down 504 1/2, the S&P 500 down 59, and the Nasdaq 100 down 61.67. The Philadelphia Semiconductor Index (SOXX) dropped another 10.37.

The technicals were unquestionably climactic. Advance-declines were 3062 down and only 164 stocks up, or about 19 to 1 negative, on New York, and just a tad better at 2538 down and 380 up on Nasdaq. Up/down volume was also climactic, with more than 1.7 billion traded to the downside and just 78 1/2 million shares on the upside on New York on total volume of billion. Nasdaq was equally as negative, with more than 2.5 billion traded to the downside and 141 million to the upside.

Those are numbers you normally see at important market bottoms, and with the VIX soaring to July levels and the put/call ratios running to levels we've seen only at important lows, we could very well have reached near important lows today. However, the indices closed at the lows going away and we'd expect that to spill over into tomorrow morning.

The vast majority of stocks were down on TheTechTrader.com board. As you can imagine, the short instruments had a stellar day, with the SDS up 6.49 and the QID up 3. With oil dropping more than $5 a barrel near the 95-6 zone, the DUG jumped 5.01 to 44.19. United (UAUA) was up $1 today on the price of oil as well.

Other than that nearly everything on our board was down. The loss leader was DryShips (DRYS), at 48.03 down 7.08 to a new 2008 low. The US Oil Fund ETF (USO) was down 5.36, Energy Conversion Devices (ENER) dropped 5.54, and Excel Maritime (EXM) 4.05.

Solar stocks got clocked, especially the juniors, with Canadian Solar (CSIQ) down 2.39 and JA Solar (JASO) 2.66. Recent Chart of the Week TWP lost 2.03.

FSYS dropped 1.71, FEED lost 1.03, and CLNE 1.27. A-Power Energy (APWR) lost 1.60, and BCSI 1.27.

Financial stocks got hammered, with AIG crushed to 4.76, down 7.38, on nearly 3/4 of a billion shares traded.

ADK at 6.24 was down 1.27, another example of a very weak financial stock today.

Stepping back and reviewing the hourly chart patterns, the indices had a sharp snapback in the morning, but were only able to get back to resistance before rolling over in a sharp 5-wave decline for the rest of the session, closing at new lows on the NDX and S&P 500 as well for the entire decline.

So the indices are in freefall and despite severe oversold conditions, the indices have not arrested downside momentum. Until they do -- and I expect that to happen potentially in the next day or two -- there is still room for additional downside.

Good trading!