We had very interesting and extremely volatile session. The indices started with a pop to the upside, and surged to new 2 ? week rally highs just slightly over Monday morning?s late high, reaching as high as 1261.41 on the NDX. The SPX also reached new rally highs, getting up to just under 827. Then they pulled back to retest and consolidate, but when a rally didn?t materialize they rolled over late-morning and hard, slicing through yesterday?s double bottom on the NDX and eventually taking out the lows on the SPX as well. Then in early to mid-afternoon they spiked down hard, culminating in a drop from 1261 NDX to 1207, and from 827 to 792 on the SPX. But in the last hour, there was a very sharp snapback, fueled by short covering, taking the indices back up, with the Dow recovering 200, the SPX 23 and the NDX 32 to close up on the day.
Net on the day the Dow was up nearly 90 to just under 7750, the S&P 500 up 7.63 to just under 814, and the Nasdaq 100 up 2.32 to 1236.66, after being up nearly 30 earlier. The Philadelphia Semiconductor Index (SOXX) also reversed by 6 points to close up 2.54 on the day at 231.49.
The technicals were positive by 21 to 9 on advance-declines on New York and 19 to 8 on Nasdaq. Up/down volume was 2 to 1 positive on New York on total volume of about 1 2/3 billion. Nasdaq traded just under 2 1/2 billion and had a little better than 3 to 2 positive volume ratio.
TheTechTrader.com board was mixed but mostly higher, as many stocks came back from losses and closed with fractional gains.
American Italian Pasta (AIPC) was up 2.31 to 33.37, trade of the day CB Richard Ellis (CBG) was up 1.92 to 4.92 on 22 1/2 million on a positive financing news. JP Morgan (JPM) jumped 2.16 to 28.56.
But that was it for the point-plus gainers today.
On the downside, the ultrashorts were off sharply in the morning, rallied in mid-afternoon, but closed down on the day, with the UltraShort Real Estate ProShares (SRS) down 1.70 to 53.64, after getting as high as 62 and change. The Direxion Financial Bear 3x Shares (FAZ), which traded as high as 23.60, closed at 19.46, down 1.69, so pretty sharp reversals in the ultrashorts.
Other gainers of note, Wells Fargo (WFC) jumped 92 cents to 16.42, portfolio position TeleCommunication Systems (TSYS) jumped 60 cents to 9.65, Morgan Stanley (MS) jumped 79 cents in a strong financial sector, portfolio position DG FastChannel (DGIT) at 18.92 was up 72 cents to a new 6-month high, and the Direxion Financial Bull 3x Shares (FAS) jumped late from 5.50 to 6.58, closing up 46 cents on 410 million shares, which I believe is an all-time volume high.
Stepping back and reviewing the hourly chart patterns, the indices broke hard, taking out minor support, but not closing there. A very sharp rally brought them back strongly into the plus column for the day in what was definitely a strong late showing for the bulls. We?ll see if there?s any upside follow-through over the next day or two.
Good trading!
Harry
