Indices Follow Through to the Downside
By Harry Boxer, TheTechTrader.com (www.thetechtrader.com)
The markets followed through to the downside on Monday after Friday's ugly session, with all indices ending down on the session.
The day started out with an immediate drop from the get-go, a rather sharp one early on that made new decline lows on the Nasdaq 100 (NDX) but held them on the S&P 500. That resulted in a sideways consolidation action for several hours into the lunch hour, at which point they drifted lower. In the afternoon they accelerated lower and took out last week's lows, and only a last-hour bounce prevented them from closing even more negatively.
Net on the day, the Dow was down more than 28, the S&P 500 around 4.70, the NDX more than 7, and the Philadelphia Semiconductor Index (SOXX) down 4.54.
The technicals confirmed the decline today, with advance-declines negative by 5 to 3 on New York and 3 to 2 on Nasdaq. The ratio of up volume over down volume was a little less than 2 to 1 negative on New York, on total volume of about 1 1/3 billion. Nasdaq traded just under 1.9 billion with a better than 2 to 1 negative ratio on up volume over down volume.
TheTechTrader.com board was mixed to lower, with some outstanding issues. By far the star of the day on all boards was Onyx Pharmaceuticals (ONXX), which on news of a new liver cancer drug leaped nearly 12 points on 55 3/4 million shares. The stock gapped up sharply, had a first-hour pullback, which was followed by a strong 7-point steady run for the rest of the session.
Other stocks of note, Low-priced Digital Music (DMGI) was up 1.29, also gapping up on news. Research Frontiers (REFR) advanced another 40 cents, following up on last week's gains, on more than 1 1/3 million. Digimarc Corp. (DMRC), one of our recent Charts of the Week, jumped 52 cents. Cleveland Biolabs (CBLI) gained 65 cents to 8.65, and Align Technology (ALGN) jumped 53 cents on more than 1 million shares. Acorda Therapeutics (ACOR) was up 88 cents, and Anadigics (ANAD), one of our recent Charts of the Week, was up 31 cents.
On the downside, Chindex (CHDX) was down 4.45 today, suffering a big loss after its earnings release. Global Sources (GSOL) was down 2.69, and Fuel Tech (FTEK) 1.65.
Stepping back and reviewing the hourly chart patterns, the indices opened lower and went down most of the day. They took out last week's lows before snapping back late. So the indices are sloppy at best and looking lower here.
We'll be watching closely the 1775 level, near today's lows, on the NDX, as well as the 1431-32 zone on the S&P 500. Beneath that more important support lies at the January lows near 765 on the NDX and around the 1417-18 zone on the S&P.
Good trading!
Harry
