Thu July 16th 2009
Strong Follow-Through Sessionby Harry Boxer,
www.TheTechTrader.comThursday’s session was a terrific follow-up to yesterday’s very strong session. The indices opened strong, backed and filled and coiled for about half the session, and then got very quiet around lunch hour. When they were unable to break intraday moving averages, trendlines or price support, the indices started to accelerate in the afternoon, particularly when well-known economist Nouriel Roubini, who’d been a bear, said he thinks we’ve seen an economic bottom and turned the corner.
That triggered buying. The indices spiked up in late afternoon trading, getting up to nearly 1522 on the NDX and nearly 944 on the SPX. In the last 10 minutes they pulled back sharply, but still ended up quite positive on the day.
Net on the day the Dow was up 95.61 to 8711.82, the S&P 500 up 8.06 at 940.74 and the Nasdaq 100 up nearly 18 at 1518.87.
The technicals were positive by about 21 to 9 on advance-declines on New York and by about 3 to 2 on Nasdaq. Up/down volume was 7 to 4 positive on New York on total volume of just under 1.2 billion. Nasdaq traded over 2 billion and had a 3 to 1 positive volume ratio.
TheTechTrader.com board was active, with many point-plus gainers. The ag/chem stocks led the way with the acquisition bid for Mosaic (MOS). That closed at 49.98, up 5.43, and Potash (POT) closed at 91.58, up 3.82.
Top 25 list member STEC Inc. (STEC) was up 4.20 to 31.7, on nearly 7 million shares after announcing a $120 million contract.
Vanda Pharmaceuticals (VNDA) also jumped late in the session, closing up 1.10 to 12.80.
Junior solars were strong, with Yingli Green Energy (YGE) up 1.09 at 12.17, and Canadian Solar (CSIQ) up 80 cents to 13.42.
Financials were mixed, with Goldman Sachs (GS) up 1.58 to 156.84. But, Morgan Stanley (MS) fell 24 cents to 28.56, Wells Fargo (WFC) lost 25 cents to 25.05, and Bank of America (BAC) was down a quarter as well to 13.17. JP Morgan (JPM) lost 13 cents to 36.13.
Fuel System Solutions (FSYS) advanced 93 cents to 21.62, Cree Inc. (CREE) 54 cents to 28.96, and low-priced oil play Brigham Exploration (BEXP) jumped 30 cents to 3.85.
On the downside, the Direxion Large Cap Bear 3X Shares (BGZ) lost 1.07, the only point-plus loser on our board, and the Direxion Small Cap 3x Bear (TZA) 93 cents.
Stepping back and reviewing the hourly chart patterns, it was a strong follow-through session that closed not far off the highs for the day. The key technical occurrence was the take out of last month’s highs an important technical breakout.
However, with the NYSE McClellan oscillator at +186, the Nasdaq 100 oscillator near +88 and the S& P 500 oscillator at +91, we’re at or very near extreme overbought conditions. Tomorrow is options expiration day, and it may be a wild one!
Good trading!
Harry
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