The markets had a volatile session, most of it spent trying to take out the highs and lows and doing so unsuccessfully until the last 15-20 minutes of the day when the market rolled over hard and closed at the lows for the day. We weren?t surprised based on the oscillators and overbought condition, as the pullback was needed , although it may last a few more sessions.
The day started out with a large gap down. They bounced and then went to lower lows in a three-wave decline that reached the 1234 area on the NDX and the 810 area on the SPX. They bounced, retested successfully and then took off mid-day and reached the session high on the SPX, actually a new rally highs by a small fraction, and when that occurred and the NDX could not match it, a negative divergence caused a 5-wave rollover over the next 3 hours, culminating in a last 15-minute accelerated decline.
Net on the day the Dow was down 115.65 at 7660.21, the S&P 500 down 16.59 at 806.33, and the Nasdaq 100 down 23.63 at 1236.23. The Philadelphia Semiconductor Index (SOXX) was down 5.67, a little more than 2 percent.
The technicals were decidedly negative. Advance-declines were negative by 2 to 1 on New York and the same on Nasdaq. Up/down volume was the real negative story today, with about a 5 to 1 negative ratio on New York on total volume of a lighter less than 1 2/3 billion. Nasdaq traded just about 2 billion, but had a 3 to 1 negative volume ratio.
TheTechTrader.com board as a result of the back and forth action closed mixed with many stocks just fractionally changed.
Leading the way were the ultrashorts, with the UltraShort Real Estate ProShares (SRS) up 5.38 to 55.18, the Direxion Financial Bear 3x Shares (FAZ) up 2.04 to 21.24, and Direxion Large Cap Bear 3X Shares (BGZ) to up 2.60 to 61.
Those were the only point-plus gainers on our board. Other gainers of note, DryShips (DRYS) had a strong session, closing at 5.55 up 65 cents on 45 million shares, and is releasing earnings after the close tonight. Excel Maritime (EXM) also in that sector was up 42 cents to 4.58.
Low-priced AgFeed Industries (FEED), our Chart of the Day recently, closed at 2.46 was up 32 cents on 3.2 million shares, and PALM was up 43 cents to 8.43 today.
On the downside, Amazon (AMZN) lost 2.95 to 72.63, Apple (AAPL) lost 1 to 106.66, and JP Morgan (JPM) was down 2.41 to 26.45. Sigma Designs (SIGM) got hammered, closing at 11.05, down 1.51. Wells Fargo (WFC) was down 1.77 in a weak financial section, closing at 15.56.
Stepping back and reviewing the hourly chart patterns, the indices gapped down at the opening, bounced around, rallied and then rolled over towards the end of the day and closed at the lows for the day going away. Is a short-term top in? It very well may be. Key underlying support beneath these levels at NDX 1220-22 and SPX 796-800 zone may be tested tomorrow, and we?ll see if they are able to hold or if the pullback will extend.
Good trading!
Harry
