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Negative Reversal Day

 February 29, 2012 08:09 PM
 

The stock market indices suffered losses today, although they opened higher and ran up to new multi-month and multi-year highs in some cases. The Nasdaq 100 reached 2645 and the Nasdaq Composite near 3000, while the S&P 500 hit 1378. They then sold off sharply, bounced mid-morning, and then backed and filled in what looked like corrective wedges. By early afternoon, when they hadn't broken out and followed through, they rolled over hard into the close, but they did bounce in the last 10-15 minutes.

Net on the day, the Dow was down 53.05 at 12,952.07, with a high of 13,055.75. So it closed more than 100 points off the high. The S&P 500 was down 6.50 at 1365.68, 13 points off its high, and the Nasdaq 100 down 10.36 at 2623.10, 22 points off its high.

It was a negative reversal day, for sure, with technicals confirming.

The technicals were about 2 to 1 negative on declines over advances on the New York Stock Exchange, and nearly 3 to 1 negative on Nasdaq. It was a definitive down day, and we may have begun a pullback here. We'll have to see if we get any downside follow-through tomorrow.

Up/down volume was a little less than 2 1/2 to 1 negative, with nearly 20 million up and 80 million down on more than 1 billion shares today on New York. Total volume increased on the downside today, and that's never a good thing. Nasdaq traded 2.1 billion shares and had a 3 to 1 negative volume ratio, with 1.6 billion down and 500 million up.

TheTechTrader.com board, as a result, had a negative day, with red across the board today. On the upside, however, low-priced Forward Industries, Inc. (FORD), on a contract, rose 53 cents to 2.89, or 22 1/2%, on a 1700% increase in volume. Gevo, Inc. (GEVO) was up 1.09 to 10.01, Quad Graphics, Inc. (QUAD) jumped 1.90 to 14.97, LSB Industries, Inc. (LXU) climbed 4.00 to 40.24, Copart, Inc. (CPRT) gained 3.97 to 40.78, and Inphi Corporation (IPHI) was up 88 cents to 14.36.

In addition, U.S. Home Systems, Inc. (USHS) had a phenomenal move, jumping 98 cents to over 14.00 to 14.09. Qihoo 360 Technology Co. Ltd. A (QIHU) had a great day, up 1.30 to 21.14. ITT Corporation (ITT) jumped 1.60 to 24.95, and ExlService Holdings, Inc. (EXLS) ran up 1.30 to 27.84.

VIVUS, Inc. (VVUS) was up 1.24 to 22.50, although it reached nearly 23.50 earlier in the day. It traded 17 million shares today.

Among the ultra ETFs, the ProShares UltraShort Silver (ZSL) exploded for 1.01 to 9.41, with the ProShares UltraShort Gold (GLL) rallying well, up 1.62 to 16.45.

Other stocks of note included Valeant Pharmceutical (VRX), which jumped 1.83 to 52.91. Nu Skin Enterprises Inc. (NUS) was up 1.77 to 57.76 and Verisk Analytics, Inc. (VRSK) 1.32 to 43.50.

Finally, Apple Inc. (AAPL) was up 7.03 to 542.44, another new all-time high, but it closed 5.00 off the high at 547.61.

On the downside, however, Coinstar, Inc. (CSTR) lost 3.87 to 58.23. The Goldman Sachs Group, Inc. (GS) was down 1.97 to 115.14. International Business Machines Corp. (IBM) dropped 1.25 to 196.73. Netflix, Inc. (NFLX) lost 2.59 to 110.73. Universal Display Corp. (PANL) got hammered, down 4.37 to 41.31. SodaStream International Ltd. (SODA) got smashed even though earnings were great, down 6.75 to 40.75, on 13.1 million.

In addition, VirnetX Holding Corp (VHC) lost 1.02 to 21.59, and Solarwinds, Inc. (SWI) dropped 1.09 to 37.26.

Stepping back and reviewing the hourly chart patterns, the indices were up early, but that was it, as they came down in hard, 3-wave declines today, bouncing off the session lows in the last 15 minutes to prevent them from closing at the lows for the day.

Nevertheless, it was a negative day, and we'll see what that translates into, and whether we get any downside follow-through in the next few days.

Good Trading!

Harry


Rich
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