Downside Follow-Through
By Harry Boxer, The Technical Trader (
www.thetechtrader.com)
The indices had another follow-up down session and ended the day at the lows for the day going away, after a nasty afternoon slide wiped out all of the morning rally efforts. They did start out with a move up, backed off and retested, but then rallied up to key overhead resistance, slightly took them out, but had no follow-through, and then began a rollover late in the morning, which accelerated after lunch hour. They did manage a mid-afternoon bounce that failed right at the intraday moving averages, and then they came down sharply in the last hour again.
Net on the day the Dow closed at 12,200, down 65, and that was 190 points off the high. The S&P 500 was down a little more than 10 at 1326.45, about 25 points off the high. The Nasdaq was down 32 1/2, 55 points off its high. So, very negative reversals once again. The Philadelphia Semiconductor Index (SOXX), which was down most of the session, closed down 10.20, or nearly 3%.
The technicals continued slipping late in the session and ended to the downside. Advance-declines were negative by a little more than 3 to 2 on The NYSE and nearly 2 to 1 on Nasdaq. Up/down volume was a little more than 2 to 1 negative on New York, with under 1.5 billion traded. Nasdaq traded nearly 2 1/3 billion and had about a 3 to 1 negative ratio on declining volume over advancing volume.
TheTechTrader.com board was nearly all negative, with just a few gainers. One exception was Multi-Fineline Electronix (MFLX), which had terrific earnings, gapped up, and ran nearly 5 points, closing up 4.92. That was the lone outstanding issue.
CHNR managed to gain 76 cents, but had been way higher than that, as high as 23 earlier in the day, but closed at 20.96, gisupportving back more than 2 points of its nearly 3-point morning gain.
FSIN, also in the Chinese sector, was up 40 cents today. IVGN jumped 5.30 on a strong earnings report and settlement of a dispute with a competitor.
On the downside, there were lots of point-plus losers, led by ACOR down 2.90, DryShips (DRYS) 2.48, Sigma Designs (SIGM) another 2.54, TBS International (TBSI) 1.30, Excel Maritime (EXM) 1.58, Cree Inc. (CREE) 1.52 and Cepheid (CPHD) 1.38.
Stepping back and reviewing the hourly chart patterns, the indices plunged in the afternoon and took out key short-term support on the Nasdaq 100. Support is still holding, however, on the S&P 500. Support level at 1320-22 on the S&P will be closely watched tomorrow for confirmation of the NDX break. That's just a few points from here. Nasdaq 100 at this point could very well take a shot at testing the late January lows again down near the 1700, but we're about 40 points away from that and it'll take a little doing.
Good trading!
Harry
