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Closing Technical Market Analysis for Tue September 25th 2012
The stock market indices suffered steep-rollover losses and closed at the session lows, breaking key support today. The top may be in, so we have to see what kind of follow-through we get. It certainly wasn’t a pretty day today. The session lows were right at the close, and the indices spiked down to them, after trying a late rally.
The day started out, however, with a little gap up, followed by a pullback that held support, and then a new rally to snapback highs at nearly 2859 NDX. The S&P 500 just got up to 1463. They were right up to key resistance, though, and then they backed off. But when they broke the 2-day rising trendline, they accelerated midday, consolidated early afternoon, and then rolled over hard, bouncing the last hour to initial resistance, failing there, and rolling over very hard into the close.
Net on the day, the Dow was down 101.37 at 13,457.55, about 175 points off the high. The S&P 500 was down 15.30 at 1441.86, 22 points off the high. The Nasdaq 100 was down 39.45 at 2804.53, 54 points off its high.
Today was a very big, negative afternoon reversal day.
Advance-declines were a little less than 3 to 1 negative on the New York Stock Exchange, and 3 to 1 negative on Nasdaq. Up/down volume was 8 to 1 negative on New York, with total volume of 1 billion shares. Nasdaq traded over 1.95 billion shares, and had a 5 to 1 negative volume ratio.
Increasing volume on the down side today is a very bad sign for the bulls.
TheTechTrader.com board, as a result, was mostly down. Leading the way on the downside, Apple Inc. (AAPL) lost 17.25 to 73.54, and closed just a fraction off the low.
Google Inc. (GOOG), however, was up to nearly 765.00 at 764.89, but closed at 749.16, down 22 cents, after having given back all of its gains. Amazon.com Inc. (AMZN) was down 2.34 to 252.46, Netflix, Inc. (NFLX) down 2.59 to 53.80, and Goldman Sachs (GS) 3.10 to 113.50.
Other losers included Sourcefire, Inc. (FIRE), down 2.15 to 50.36, and SodaStream International Ltd. (SODA) down 1.20 to 38.19.
The Direxion Daily Financial Bull 3X Shares (FAS) was down 4.64 to 105.25, and the Direxion Daily Small Cap Bull 3X Shares (TNA) 2.64 to 62.29, were among other losers on our board today.
Also included on the downside were some stocks that we recommended as short trades that did very well today. Forward Air Corp. (FWRD) was down 3.97 to 30.84, Tesla Motors, Inc. (TSLA) lost 3.00 to 27.66, Deckers Outdoor Corp. (DECK) down 2.52 to 34.99, CEVA Inc. (CEVA) 1.03 to 14.56, Zumiez, Inc. (ZUMZ), a recommendation in a Forbes by HB, 1.12 to 25.39, Big Lots Inc. (BIG) 1.28 to 29.59, True Religion Apparel Inc. (TRLG) 73 cents to 21.57, Lincoln Electric Holdings Inc. (LECO) 1.19 to 38.99.
In addition, some of the Boxer Shorts had a good down day today. Abercrombie & Fitch Co. (ANF) was down 96 cents to 34.57, and a recent swing-trade short, Con-way Inc. (CNW), lost 71 cents to 26.89.
Stocks on the upside today included the ProShares Ultra VIX Short-Term Futures ETF (UVXY), which was the outstanding stock of the day, up 4.44 to 32.89, or 16%, on 8.9 million shares. The Direxion Daily Financial Bear 3X Shares (FAZ) was up 71 cents to 18.20, and the Direxion Daily Small Cap Bear 3X Shares (TZA) jumped 62 cents to 14.77.
There were stocks on the long side that we traded this morning that did well today, including low-priced biotech, Peregrine Pharmaceuticals Inc. (PPHM), which gained 57 cents to 1.73, or 49%, on 55.5 million shares. That was a big move for that stock.
ProShares Ultra Long DJ-UBS Natural Gas (BOIL) exploded 1.85 to 45.00.
Pharmacyclics Inc. (PCYC) was up 1.15 to 62.40, Nationstar Mortgage Holdings Inc. (NSM), one of our recent favorites in the mortgage sector, up 87 cents to 33.04, bucking the trend today. Medivation, Inc. (MDVN) jumped 1.06 to 54.25, and ASML Holding NV (ASML), down 1.02 to 53.41, rounded out the winners on our board today.
Stepping back and reviewing the hourly chart patterns, the indices had a morning rally and got to new snapback highs, but failed to take out overhead resistance. They rolled over hard in a 5-wave decline, which culminated with a finish at the close, just above secondary support near 1440 on the S&P 500, closing at 1441.86.
We’ll see how it goes tomorrow, but we may see some dire consequences from today’s moves.
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