Thu August 27th 2009
Indices Claw Back into Positive Territory with Big Snapback Rallyby Harry Boxer,
www.TheTechTrader.comThe markets got a lot of volatility on Thursday. They were down sharply in the morning, even breaking support, then bounced back mid-morning, and accelerated into early afternoon, before consolidating late in the session. Net on the day, the indices managed to claw their way back into positive territory.
Net on the day the Dow was up 37.11 to 9580.63, with a 9459 low. The S&P 500 was up 2.86 to 1030.98, with a low near 1016. The Nasdaq 100 was up 3.97 to 1640.97, and that was 29 points off its low.
Advance-declines worked their way back into positive territory by 240 issues on New York but remained negative by 110 issues on Nasdaq. Up/down volume was better than 2 to 1 positive on New York on total volume of a light 1.1 billion. Nasdaq traded 2.1 billion and had a 13 to 8 positive volume ratio.
TheTechTrader.com board was mostly narrowly changed to the negative side. Leading the way again by far on the upside was American International Group (AIG), which vaulted from 39.25 near the opening to over 50 by late-morning, closing at 47.84, up 10.15 or 27% on 148 million shares.
Citigroup (C) led the way in the financials, vaulting over 5 at 5.05, up 42 cents on 1.2 billion shares. But the banks were a narrowly mixed sector today, with Wells Fargo (WFC) up only 12 cents, Goldman Sachs (GS) down 93 cents, Morgan Stanley (MS) up 31 cents and JP Morgan (JPM) up 50 cents.
In the ETF sector, the Direxion Financial Bull 3x Shares (FAS) was ahead 2.06 to 79.71, reaching over 80 at one point. The U.S. Oil Fund ETF (USO) gained 77 cents to 37.72 on firmer oil. Most of the other ETFs on our board were narrowly mixed.
Chart of the Day Electro-Optical Sciences (MELA) vaulted from 9.56 in the morning to 10.63 in the afternoon, closing at 10.45, up 63 cents on 1 1/2 million shares. We added that to our model portfolio today.
OncoGenex Pharmaceuticals (OGXI) jumped 1.96 to 35.04. Low-priced EDAP (EDAP), also a portfolio holding, jumped from 3.43 to 4.48 before backing off to 4.04 at the close, still up 63 cents on 4.4 million. Dry Ships (DRYS) came on strong today, jumping from 5.57 to 6.35, closed at 6.24, up 55 cents on 47 million shares.
On the downside, the only point-plus loser on our board today was Human Genome Sciences (HGSI), which continued its pullback, down 1.54 to 18.96, but 90 cents off its low.
Stepping back and reviewing the hourly chart patterns, the indices broke down from their head and shoulder top patterns sharply this morning, but reached secondary support and held there. Then they began clawing their way back and accelerated in the afternoon and squeezed the shorts some more. Today’s session definitely puts a question mark on the direction of the current trend.
Good trading!
Harry
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