The stock market had a strong sell-off today on negative individual company
and economic news.
The market indices gapped sharply lower as the futures were down sharply
before the opening. They then bounced back a couple times to test resistance and
failed both times, and in the afternoon as a result of that they rolled over
steadily and sharply, reaching new 2-day pullback lows under 1230 on the Nasdaq
100 and under 902 on the S&P 500.
They did bounce late in the session, but net on the day it was a negative
session for sure, with the Dow down 245, the S&P 500 more than 28, and the
Nasdaq 100 nearly 36. The Philadelphia Semiconductor Index (SOXX) fell 11.44, a
loss of more than 5 percent.
The technicals confirmed the very weak day on the Street. Advance-declines
were negative by more than 4 to 1 on New York and by less than 3 to 1 on Nasdaq.
Up/down volume was the real story, though. The NYSE had 145 million shares up
and nearly 1.1 billion down on New York, about a 7 1/2 to 1 ratio, on total
volume of 1 1/4 billion. Nasdaq traded over 2 billion and had a 3 1/2 to 1
negative volume ratio.
TheTechTrader.com board had a very negative session. Multiple-point losses
included SunPower (SPWRA), down 4.17 to 38.07, with a low of 36.68 today, and
DryShips (DRYS), down 2.27 to 12.96 on 26 1/2 million shares. We took big
profits on both of those model portfolio positions recently. Energy Conversion
Devices (ENER) dropped 2.47 to 26.74.
Agriculture stocks had a negative session. Potash (POT) dropped 4 points off
its high, closing down 77 cents on the day. Agrium (AGU) fell 1.23, Mosaic (MOS)
12 cents, and CF Holdings (CF) 1.99.
The U.S. Oil Fund ETF (USO) fell 3.99 to 33.27 on the sharp drop of more than
$5 in the price of crude oil. Bull ETFs had a negative session, with Direxion
Large Cap Bull 3X Shares (BGU) down 3.44, the Ultra Oil & Gas ProShares
(DIG) 2.67, the iShares FTSE/Xinhua China 25 Index (FXI) down 2.26 and iShares
MSCI Brazil Index ETF (EWZ) 2.39.
Hartford Financial Services (HIG) fell 1.77 to 17.91, Questcor (QCOR) 1.46 to
7.39, and Apple (AAPL) dropped 2 points 91.01.
On the plus side, the outstanding stock today was NetScout Systems (NTCT), up
3.05 to 13.29 on strong earnings guidance and upgrades. Short ETFs did well, of
course, with the Ultrashort QQQQ ProShares (QID) up 2.75 and the Direxion Large
Cap Bear 3X Shares (BGZ) up 4.57.
Stepping back and reviewing the hourly chart patterns, the indices plunged at
the opening, failed to get through resistance, and then made lower lows all day
before snapping back late in the session. But they may have broken the back of
the recent uptrend, and short-term support was violated.
So we'll have to see if they can recover quickly tomorrow, or whether they're
headed lower for the next few days.
Good trading!
