Fri January 22nd 2010
Indices End the Week Getting Crushed Again! by Harry Boxer,
www.TheTechTrader.comThe stock market indices got crushed Friday to end the week on a down note, and it wasn’t pretty.
The indices rolled over hard mid-day and closed at the lows for the day going away, with Dow down nearly 217 at 10172.98. The S&P 500 lost nearly 25 at 1091.76, and the Nasdaq 100 nearly 56 at 1794.82.
The day started out with a morning down thrust that immediately broke yesterday’s lows. They then bounced back to those levels, but failed to break through and then rolled over slowly at first and then accelerated to the downside, especially in the last 90 minutes.
The technicals were negative by 5 to 1 on advance-decline on New York and 2 1/2 to 1 on Nasdaq. Up/down volume was about 7 to 1 negative on New York on total volume of under 1.5 billion. Nasdaq traded a hefty 3 billion and had a just under 5 to 1 negative volume ratio.
TheTechTrader.com board as a result was mostly negative, but there were some outstanding stocks today. Junior biotechs were strong. Somaxon Pharmceuticals (SOMX) leapt 1.08 to 2.40, a gain of almost 90%, and Momenta Pharmaceuticals (MNTA) added 1.70 to 15.12. Junior biotech Poniard Pharmaceuticals (PARD) advanced 47 cents to 2.61, and GenVec (GNVC) up 60 cents to 2.99.
RINO International (RINO) jumped 1.01 to 23.59, although it did trade as high as 24.74 earlier. Rambus (RMBS) rose 72 cents to close at 24.74, although it did trade at 26 earlier on a very positive court ruling against Nvidia (NVDA).
China Agritech (CAGC) also snapped back, as Chinese stocks got exhausted early on and snapped back in the afternoon. That closed at 31, up 3 off its low, about 1.70 off its high, but up 96 cents on the day.
The Direxion Financial Bear 3x Shares (FAZ) was a winner today, up 1.65 to 19.88. The Direxion Large Cap Bear 3X Shares (BGZ) jumped 1.11 to 17.90, the Direxion Small Cap 3x Bear (TZA) 53 cents to 9.99, and the UltraShort Real Estate ProShares (SRS) 33 cents at 8.15.
On the downside, the big losers were the ultralong ETFs, with the Direxion Financial Bull 3x Shares (FAS) dropping 7.05 to 70.29 and the Direxion Large Cap Bull 3X Shares (BGU) 3.51 at 49.39.
A-Power Energy (APWR) fell 1.05 at 12.31, and Canadian Solar (CSIQ) got hammered to 21.56, down 2.51, after being over 33 just a week and a half ago. Telestone Technologies (TSTC) rounded out the point-plus losers on our board, down 1.84 to 16.87.
Other losers of note, Human Genome Sciences (HGSI) fell 78 cents to 27.14, SmartHeat (HEAT) 75 cents to 13.50, Kandi (KNDI) 34 cents to 4.82, Nanometrics (NANO) 58 cents to 10.16, and Origin Agritech (SEED) 36 cents to 10.82.
Stepping back and reviewing the hourly chart patterns, they were down in the morning, bounced mid-morning, rolled over by mid-day and accelerated to the downside at the end of the day, closing near the session lows going away, putting the oscillators at oversold extremes with the VIX and VIXN up sharply off their lows. Just in the last two sessions, the VIX has gone from about 17 ½ to 28, an amazing sudden jump in the fear indexes.
But with today’s negative tic of -1350 on the NYSE late in the session, we could have reached extreme oversold conditions short-term and, as a result, I expect a bounce back retest of resistance next week.
Good trading!
Harry
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