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Closing Technical Market Analysis for Tue October 19th 2010
The stock market indices opened with big gaps down today, fell sharply lower, but did rally back in the morning to take back about half the losses, but that was a 3-wave corrective-looking rally. Then they rolled over late morning to early afternoon sharply, bounced a couple times, managed to hold the morning lows on the Nasdaq 100, but took them out twice on the S&P 500, reaching down just below 1160. They snapped back in the last 15-20 minutes and took back a chunk of the losses.
Net on the day, the Dow was down 165.07 at 10,978.62, with a low down around 10,917, so you can see they bounced about 60 points. The S&P 500 fell 18.81 to 1165.90, closing about 6 points off its low, but still a very negative session. The NDX was down 34.42 at 2069.73, still about 15 points off the low. At one point it was down nearly 50 points.
Advance-declines were 5 to 1 negative on the New York Stock Exchange, and 5 to 1 negative on Nasdaq as well. Up/down volume was 9 to 1 negative on New York on total volume of 1.3 billion. Nasdaq traded just under 2.25 billion, and had about a 6 to 1 negative ratio of declining volume over advancing volume.
TheTechTrader.com board was nearly all negative today, with only a few stocks on the upside. The standout was Goldman Sachs (GS) up 3.02 to 156.72. Molycorp Inc. (MCP) gained 3.30 to 34.26, and Rare Element Resources Ltd. (REE) 1.88 to 11.50. Both are rare earth companies, benefitting as China announced a curtailment of shipments to the United States.
ETFs had a very strong session. The Direxion Daily Emerging Markets Bear 3X Shares (EDZ) was up 2.26 to 25.62, and the Direxion Small Cap Bear 3X Shares (TZA) up 1.25 to 23.48.
In addition, iPath S&P 500 VIX Short-Term Futures ETN (VXX) was up 45 cents to 14.48, The Direxion Daily Financial Bear 3X Shares (FAZ) up 40 cents to 12.80, and The Direxion Daily Large Cap Bear 3X Shares (BDZ) up 43 cents to 11.57.
On the downside, leading the way was Apple Inc. (AAPL) down 8.51 to 309.49, but that was 9 points off its low earlier after releasing earnings last night. Amazon.com (AMZN) dropped 4.89 to 158.67, and Cree Inc. (CREE) 2.56 to 53.00, but in afterhours was trading 5.00 lower after releasing earnings. Motricity Ind. (MOTR) got hammered down 2.70 to 15.30, Radware Ltd. (RDWR) 1.20 to 32.72, Trina Solar Ltd. (TSL) 1.67 to 26.26, VirnetX Holding Corp (VHC) 1.33 to 15.89, and JinkoSolar Holding Co. Ltd. (JKS) 1.29 to 27.67, also in the weak solar group. Dendreon Corp. (DNDN) also gave back 1.23 to 36.22, Amtech Systems Inc. (ASYS) 1.55 to 18.11, and American Superconductor Corp (AMSC) 1.35 to 34.31.
So, a very negative session with the vast majority of the stocks on our board down and some of them very sharply.
Stepping back and reviewing the hourly chart patterns, the indices opened sharply lower, moved down even further, and at one point was down about 50 on the NDX before snapping back to take back half of the losses, only to rollover at the end of the day to retest the lows successfully. A late bounce brought them back up to retest declining topslines and moving averages intra-day.
We’ll see what that means and whether it was nothing more than a late short-covering bounce on the NDX as well as on the S&P 500. The difference is the S&P made two lower lows today, while the NDX held support and did not confirm yet.
We’ll see how it goes tomorrow.
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