Indices Experience Intraday Five-Wave Decline
By Harry Boxer, TheTechTrader.com (www.thetechtrader.com)
The market had an ugly session on Wednesday. Other than the opening gap up, which then led to a test of resistance that failed, the indices basically spent the rest of the day moving downward in a five-wave decline. Only a last 15-minute snapback brought them off the lows for the session.
Net on the day, the Dow was down nearly 50, the S&P 500 more than 10, and the Nasdaq 100 almost 25. The Philadelphia Semiconductor Index (SOXX) was down nearly 2 percent, or 8.85.
The technicals bore out the nasty day today, with a 2 to 1 negative advantage of decliners over advancers on New York and nearly 3 to 1 on Nasdaq. Up/down volume was about 3 , to 1 negative on New York on total volume there just under 1.8 billion. Nasdaq traded more than 2 billion today, and had about a 4 , to 1 negative ratio.
TheTechTrader.com board was mostly negative, and there were some outstanding losers today. Recent trading favorite NVE Corp. (NVEC) got hammered for 4 , points on nearly 1.2 million shares today. U.S. Global Investors (GROW) was down 2.08, Energy Conversion Devices (ENER) off 1.28, and Sigma Designs (SIGM) down nearly 2 today on 1.1 million shares. Apple Computer (AAPL) gave back 1.92.
Other losses of note, Broadcom (BRCM) fell 84 cents, Versant (VSNT) 95 cents, Pacific Ethanol (PEIX) 72 cents, and Lumera (LMRA), which made a new all time high this morning at 9.43, closed down 63 cents to 8.08 in a strong negative reversal in the afternoon.
Fuel Tech (FTEK) gave back 60 cents, China Medical (CMED) 51 cents, Acorda Therapeutics (ACOR) 56 cents, and Align Technology (ALGN) 94 cents.
On the plus side, there were fractional gains by Chindex (CHDX), one of our recent picks, up 42 cents. Flamel Technologies (FLML) was up 42 cents as well, and AOB gained 20 cents today, hitting a new all-time high this morning just under 8. The GLD gold tracking stock, one our recent portfolio additions, had an outstanding day today, gaining 1.12 on more than 8 million shares, due to the sharp rise in gold.
Stepping back and reviewing the hourly chart patterns, the indices came down rather sharply today and broke key short-term support at 1712 NDX and 1372 S&P. That broke multi-week trendlines, as well, but the indices still closed at or above their 3-month rising channel bottom.
We'll see if there's a downside follow-through that confirms a new downtrend is in place. Right now it sure looks like it.
Good trading!
Harry
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