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Indices Roll Over Late On Negative Divergence

 March 28, 2012 02:37 AM
 


The stock market indices suffered a later slide and brought the blue chips into the negative column. The Nasdaq 100, which had been up quite sharply, even though it pulled back 11 points, closed up 4 points on the day. At the end of the day, however, technicals turned negative, and the market slid after making new multi-year highs.

The indices moved up sharply in the morning, pulled back to retest, and made higher highs, consolidated, and then made new highs on three or four occasions in the afternoon on the Nasdaq 100 up near the 2793-4 zone. The S&P 500 morning high at 1419 could not be taken out. It was a mixed session most of the day, with the Nasdaq 100 continuing to make nominal new highs, and the S&P 500 failing to take out the morning highs. That negative divergence rolled them over into the close. In the last 45-50 minutes, they slid from 2793 1/2 down to 2780 on the NDX closing at 2782, and the S&P 500 slid from about 1419 down to 1412.

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Net on the day, the Dow was down 43.90 at 13,197.73, and the S&P 500 down 3.99 to 1412.52. The Nasdaq 100 was up 4.10 at 2782.12, mostly because Apple Inc. (AAPL) was up 7.50 to 614.48, after hitting a high of 616.28 earlier in the day.

Advance-declines were nearly 17 to 12 negative on the New York Stock Exchange, and 3 to 2 negative on Nasdaq. Up/down volume was 2 1/2 to 1 negative on New York, with total volume of 720 million shares traded today, or more than 500 million to the downside. Nasdaq had an 8 to 7 negative volume ratio.

TheTechTrader.com board was most negatively fractionally lower, but there were some important movers today. One of the highlights of the day was the VelocityShares Daily 2x VIX (TVIX), which came back with a vengeance today, up 1.09 to 6.97, or 18 1/2%, on 19 million shares traded. We traded that a couple times. pSivida Corp. (PSDV) jumped 67 cents to 2.50, or 36 1/2% today. EPAM Systems, Inc. (EPAM) was up 4.13 to 21.11, or 25%, on 1.3 million shares. Low-priced Wave Systems Corp. (WAVX) gained 32 cents to 2.06, or 18%. XOMA Corporation (XOMA) was up 36 cents to 2.73, or 15%, on 4.2 million shares. Yelp Inc. (YELP), a new IPO, was up 3.05 to 27.65, or 12%, on 3.1 million shares. E-Commerce China Dangdang Inc. (DANG) jumped 69 cents to 8.15, or 9 1/2%, on 8.8 million shares. Spanish Broadcasting System, In (SBSA) advanced 42 cents to 4.38, or 10.6%.

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In addition, Wabash National Corporation (WNC) gained 93 cents to 10.71. Carrols Restaurant Group, Inc. (TAST) continued higher after yesterday's announcement, up 1.33 to 15.42. KiOR, Inc. (KIOR) rose 86 cents to 12.46, Arabian American Development Co (ARSD) 69 cents to 9.87, VASCO Data Security International (VDSI) 61 cents to 10.56, and Bonanza Creek Energy, Inc. (BCEI), which we traded today, 1.00 to 21.50. Swing trade Allot Communications Ltd. (ALLT) climbed 98 cents to 22.92, and Meritage Homes Corporation (MTH) 1.07 to 28.31.

In a rare-earth group, Molycorp, Inc. (MCP) came back to close up 2.45 to 32.16, and Rare Element Resources (REE) was up 35 cents to 6.38.

The iPath S&P 500 VIX Short Term Futures (VXX) did well today, up 1.53 to 17.20.

On the downside, Goldman Sachs (GS) lost 1.74 to 126.33, and Netflix, Inc. (NFLX) fell 1.32 to 120.67. The Direxion Daily Small Cap Bull 3X Shares (TNA) dropped 1.35 to 64.68, and Direxion Daily Financial Bull 3X Shares (FAS) gave back 2.75 to 110.12. Those were the only point-plus losers on our board today.

Stepping back and reviewing the chart patterns, the indices, after opening strong and pulling back to retest, moved higher on the NDX, but the S&P 500 refused to follow, and that resulted in a negative divergence to cause a late rollover.

We'll see how it goes tomorrow.

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