Up-Session Ahead of FOMC Decision
By Harry Boxer, TheTechTrader.com (www.thetechtrader.com)
We had an up-session today ahead of the FOMC decision tomorrow. But it was tough going, especially on Nasdaq. However, in the last couple hours they firmed up again and closed positive.
The day started out with a gap up, a pullback, and then some back-and-forth action. They rallied strongly just before lunch hour with the S&P 500 taking out yesterday's highs, but the NDX fell far short and didn't confirm, and when that occurred they had a mini, 5-wave sell-off lasting into mid-afternoon. But the 3-day trendlines held on the Nasdaq 100 and the 2-day trendlines on the S&P 500, and they firmed up steadily although in a non-impulsive manner over the last couple hours.
Net on the day they closed up 33 , on the Dow, 8.20 on the S&P, and just 2.68 the Nasdaq 100, with the Philadelphia Semiconductor Index (SOXX) barely ahead by only 0.30.
The technicals, however, were very solid, with advance-declines positive by 23 to 10 on New York and 3 to 2 on Nasdaq. Up/down volume was 2 , to 1 positive on New York on a total of about 1.5 billion. Nasdaq traded about 1 ¾ billion with about an 11 to 6 positive ratio.
TheTechTrader.com board was active, with today's action led by Align Technology (ALGN), which beat earnings estimates and gave positive guidance, closing at 16.69, up 2.92 on 8.7 million.
Portfolio position US Oil Trust (USO) soared today as the price of oil was up nearly $3 a barrel. The USO closed at 47.32, up 2.35 on 5.7 million.
Other than that the only other point-plus gainer was former Chart of the Week Radio Shack (RSH), which broke out across a 52-week high, jumping 1.04 to 21.86 on 7.7 million.
Among portfolio positions, Global Sources (GSOL) was up 53 cents, ClickSoftware (CKSW) up 21 cents, Aluminum Corp. of China (ACH) up 38 cents, and Captaris (CAPA) up 43 cents to 8.90 and a new 6 ,-year high. XIDE broke out today and jumped 48 cents on 2.3 million.
Among other gainers, Energy Conversion Devices (ENER) advanced 46 cents, OSI Systems (OSIS) was up 37 cents, and Qiao Xing Universal Telephone (XING) went to a new multi-year high today, backed off, but still closed up 30 cents on 1.8 million.
Stepping back and reviewing the hourly chart patterns, the NDX has been backing and filling for three days now in what appears to be potentially a large bear flag. If it does manage to hold, the current action can still be construed as a mini-base, but it's likely that the way the pattern is developing, coming off a sharp down move, it could lead to further declines if it breaks to the downside.
The S&P has a head-and-shoulders topping-type pattern of sorts over the last couple weeks, and the right shoulder may be forming here, but we'll see how it goes tomorrow. News from the FOMC and what they have to say will obviously affect trading. We're expecting quiet action in the morning and some volatility after the Fed announcement.
Good trading!
Harry
