Thu October 1st 2009
Collapsing Into the Closeby Harry Boxer,
www.TheTechTrader.comIt was an extremely negative session for the indices as they dropped from the get-go, fell sharply all morning, stabilized around mid-day, tried to rally back mid-afternoon but failed at resistance, and then rolled over, especially in the last 10 minutes when they collapsed into the close.
Net on the day the Dow was down 203 at 9509.28, the S&P 500 27.23 to 1029.85, and the Nasdaq 100 a whopping 52.58 to 1666.41.
Advance-declines were 5 to 1 negative on New York and 4 1/2 to 1 negative on Nasdaq. Up/down volume was nearly 20 to 1 negative on New York on total volume of nearly 1.6 billion. Nasdaq traded about 2 1/4 billion and had about a 15 to 1 negative volume ratio.
TheTechTrader.com board was nearly totally negative. Only portfolio position CEL-SCI (CVM) closed positively, up 7 cents to 1.79, as did the ultrashorts, several of which we have in the portfolio.
Direxion Financial Bear 3x Shares (FAZ) jumped 2.44 to 23.23 on 93 1/2 million, Direxion Large Cap Bear 3X Shares (BGZ) 1.66 to 23.07 on nearly 14 million, and the Direxion Small Cap 3x Bear (TZA) 1.03 to 13.17 on 31.6 million. The UltraShort Real Estate ProShares (SRS) rose 82 cents to 10.51 on 49 million.
The Direxion Financial Bull 3x Shares (FAS), on the other hand, fell 9.53 to 72.60, on nearly 40 million shares.
Financials took it in the chin today, with Goldman Sachs (GS) down 5.36 to 178.99, Wells Fargo (WFC) 1.58 to 26.60, and JP Morgan (JPM) 2.45 to 41.37.
American International Group (AIG) dropped 3.21 to 40.90, Dendreon (DNDN) 1.30 to 26.69, Rambus (RMBS) 1.32 to 16.08, and United (UAUA) 1.98 to 7.24 on heavy volume after announcing a secondary.
RINO International (RINO), which has been very hot of late, gave back 1.89 to 19.25.
Stepping back and reviewing the hourly chart patterns, they were down sharply in a 5-wave decline in the morning, followed by a multi-hour consolidation, but they were unable to break out and rolled over in the last couple hours, heavily in the last 10-20 minutes to close at the session lows going away.
A very negative close. The key to today's action was that short-term support decisively taken out at 1690-91 on the NDX and the 1040-41 area SPX. With the NDX closing at around 1666 and the SPX at 1029 augurs well for additional downside action over the next day or two.
Good trading!
Harry
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