The markets had what I consider a very important technical session today.
After an early bounce failed, the indices went sharply lower to retest last
week's low, and made just nominal new lows on the Nasdaq 100 but higher lows on
the S&P 500. When that occurred they rallied sharply late morning, the NDX
running from 1192 to 1279, and the S&P 500 from 866 to 919. They then backed
and filled for the next three hours in a very bullish consolidation pattern that
on three occasions held intraday price and moving average support. In the
afternoon when it was apparent they weren't going lower, they turned around and
rallied sharply, with the NDX jumping from 1240 to 1311. It closed there at the
high for the day going away, while the S&P 500 jumped from 890 to 947,
closing right at that high.
Net on the day the Dow was up 401, and at one point late in the session was
over 9000, but closed at 8979. The S&P 500 was just a point off the high, up
38.59 to 946.43. The Nasdaq 100, at just under 1313, closed up 68.74, which was
120 points off the low. So tremendous reversal rallies off key support lows
today. The Philadelphia Semiconductor Index (SOXX) jumped 10.30 or 4 percent.
Advance-declines rallied sharply into the plus column by 22 to 9 1/2 on New
York and a little better than 2 to 1 on Nasdaq. Up/down volume was very positive
by just under 4 to 1 on New York on total volume of just under 2 billion. Nasdaq
traded about 3 1/3 billion and had an excellent ration of 6 1/2 to 1 positive on
advancing over declining volume.
The indices now have the appearance of a double bottom, but they closed at
moving average resistance on the hourly charts, so we'll have to see what kind
of follow-through we get tomorrow.
TheTechTrader.com board was very active, sharply lower in the morning, but
reversed sharply higher, with most stocks coming back strongly from their early
morning lows. Energy Conversion Devices (ENER), which dropped down to 36.24,
closed at nearly 43, up 5.19 on 3.2 million. United (UAUA), a pick of ours this
morning, had an excellent day with the sharp drop in oil under $70 a barrel,
closed at 10.30, up 2.95 on 27 million shares, after reaching as low as 7.32 and
as high as 10 3/4.
Continental Airlines (CAL) also had a similar move, jumping from 12.40 to
15.93, closing at 15.75, up 2.91 on 18.7 million.
Alpha Natural Resources (ANR) got down as low as 30.85 and closed at 36.22,
the high for the day going away, up 5.21, a big reversal there. Apple (AAPL)
similarly jumped from 91.74 to 103.43, closing at 101.89, up 3.94 on 69 million,
a nice reversal there.
The QLD reversed, with a 28.27 low and 34.27 high, closing at 34.27 at the
high for the day going away, up 3.50 on 86 million.
So, some very strong reversals on heavy volume today. That's what I was
looking for and that's what we got.
On the downside, the SDS fell 8.41, QID 8.21, and the DUG 10.10, as they are
obviously short instruments.
Stepping back and reviewing the hourly chart patterns, the indices formed
what looked like inverse head and shoulder patterns, and then after a
mid-afternoon consolidation exploded higher. We'll see how it goes over the next
couple days, but today was a technically bullish session, indeed.
