Sat May 16th 2009
Late Sell-Off Closes Indices Lowerby Harry Boxer,
www.TheTechTrader.comThe markets ended the week on a down note, but started the day Friday with a strong rally. However, the S&P 500 wasn’t nearly as strong as the Nasdaq 100.
After a soft opening, the indices immediately snapped back and rallied strongly, taking the NDX up 1374. The SPX at that point rallied to 897, but couldn’t get above yesterday’s 898 high. That negative divergence resulted in a sharp rollover. They bounced mid-day and tried to consolidate, but kept stair-stepping lower. In the last hour they did snapback to take back some of the losses, but in the last 10 minutes rolled over once again and ended on a negative note.
Net on the day the Dow was down 62.68 at 8268.64, and the S&P 500 down 10.19 at 882.88, closing right at the prior support lows it had broken late in the day. The Nasdaq 100 was down 4.56 to 1355.11, and the Philadelphia Semiconductor Index (SOXX) fell 2.10 to 242.28.
The technicals were decidedly negative by 2 to 1 on advance-declines on New York and by 8 to 5 on Nasdaq. Up/down volume was nearly 4 to 1 negative on New York on lighter total volume of under 1.5 billion. Nasdaq traded just over 2 billion and had about a 4 to 3 negative volume ratio.
TheTechTrader.com board was narrowly mixed, but there were several point-plus movers. The UltraShort Financial ProShares (SKF) gained 1.63 to 47.52, UltraShort Real Estate ProShares (SRS) 1.53 to 24.46, and American Italian Pasta (AIPC) jumped 1.20 to 28.11, bouncing back from recent heavy losses.
Those were the only point-plus gainers on our board today.
On the downside, the U.S. Oil Fund ETF (USO) lost 1.10 to close at 31.30, as oil dropped more than $2 today. Amazon (AMZN) gave back 1.51 to close at 73.60. Those were the only point-plus losers on our board.
Among the fractional gainers, DryShips (DRYS) advanced 75 cents to close at 6.84 on 115 million shares. However, it was much higher earlier, at 7.53 mid-day. The Direxion Small Cap 3x Bear (TZA) added 48 cents to 30.03, and the Direxion Financial Bear 3x Shares (FAZ) advanced 30 cents at 5.90 on 270 million shares traded. DG FastChannel (DGIT) snapped back 50 cents today to 18.81.
Among fractional losers, financials were somewhat weak, with Wells Fargo (WFC) off 82 cents at 24.87 and Bank of America (BAC) down 64 cents at 10.67. That’s now down about 40% just in the last week or so.
Stepping back and reviewing the hourly chart patterns, the indices continued their downtrend this week in an orderly fashion, rallying back up to the declining moving averages in the morning and then rolling over in the afternoon to close with losses on the day.
We’ll see if they carry the losses of the last few sessions into next week or not, but right now there’s a new downtrend in force and we’ll see how long it lasts.
Good trading!
Harry
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