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Will NDX Break Through Or Rollover?

 October 16, 2012 08:05 PM

The stock market indices had a very nice follow-up session to yesterday's rally. They exploded early on, and ran until midday when they pulled back and consolidated. The S&P 500 formed a falling wedge, and the NDX a more regular wedge. They then ran up into the close, and snapped back to retest the session highs to make a nominal new high on the Nasdaq 100 of over 2781 just before the close. The S&P 500 did not make a new high, but reached right up to its old high, before backing off. However, they closed near the session highs for the day.

Net on the day, the Dow was up 127.55 at 13,551.78, the S&P 500 up 14.79 at 1454.92, and the Nasdaq 100 up 38.51 at 2778.38.

Advance-declines were more than 3 to 1 positive on New York Stock Exchange, and 2 to 1 positive on Nasdaq. Up/down volume was nearly 4 to 1 positive on New York, with total volume of a light 613 million shares. Nasdaq traded over 1.7 billion, and had a 2 to 1 positive volume ratio.

[Related -US Stock Market Regained The Lead In Last Week's Rally]

TheTechTrader.com board was mostly higher. Apple Inc. (AAPL) reversed from 631 to 650 and closed at 649.79, up 15.03, which certainly helped the NDX. Google Inc. (GOOG) was up 3.72 to 744.70, and International Business Machines Corp. (IBM) up 2.07 to 211.00.

Onyx Pharmaceuticals, Inc. (ONXX) jumped to a new all-time high at 91.54, and closed up 2.62 to 91.46. Netflix, Inc. (NFLX) was up 1.29 to 66.05. Cliffs Natural Resources Inc. (CLF) popped 2.93 to 44.07, an outstanding move today.

Other gainers of note on our board today included low-priced Identive Group, Inc. (INVE), up 24 cents to 1.29, or 23%, on 5.9 million shares, a 3000% increase in volume. OM Group Inc. (OMG) snapped back 2.26 to 19.97, or 13%, on 1 million shares. Otelco Inc. (OTT) jumped 30 cents to 2.65, or 13%, on nearly a half million shares. Ampio Pharmaceuticals, Inc. (AMPE) spiked 42 cents to 4.07, or 11 1/2%.

[Related -Why Companies SHOULD Offer Earnings Guidance]

In addition, Aegerion Pharmaceuticals, Inc. (AEGR) popped another 1.69 to 19.15. First Solar, Inc. (FSLR) had an excellent day, up 1.85 to 24.10, on 8 million shares. Murphy Oil Corporation (MUR) was up 4.74 to 63.74, Texas Industries Inc. (TXI) 3.28 to 44.47, Domino's Pizza, Inc. (DPZ) 2.92 to 41.16, and Questcor Pharmaceutical (QCOR) 1.70 to 24.88.

Aruba Networks, Inc. (ARUN) gained 1.42 to 21.14, IPG Photonics Corporation (IPGP) 3.90 to 59.35, Movado Group, Inc. (MOV) 2.01 to 34.36, Calumet Specialty Products (CLMT) 1.72 to 30.79, 3D Systems Corp. (DDD) 2.13 to 39.92.

On the downside, the only point-plus losers on our board were Goldman Sachs (GS), down 1.28 to 123.22, and the ProShares Ultra VIX Short-Term Futures ETF (UVXY), down 1.30 to 26.49.

Stepping back and reviewing the hourly chart patterns, the indices gapped up, ran very hard all morning, stalled midday at 2780 NDX and 1456 S&P 500. They consolidated and formed wedges before snapping back late in the day to close near the session high.

It was an excellent day, but the NDX closed right at key overhead resistance from the prior broken support line at 2780. It's going to be important that it breaks through here, or we may see a rollover and an extension of the decline.

Let's see what happens tomorrow.

Good Trading!


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