Indices Rally off Lows in Down Session
By Harry Boxer, TheTechTrader.com (www.thetechtrader.com)
The indices had a similar day today as yesterday in terms of the patterns. They opened lower, this time much more sharply lower than yesterday, similar to what we had on Tuesday, but after only nominal new lows beyond that, they then rallied very sharply in the morning, similar to yesterday, pulled back and meandered sideways in a trading range for the rest of the session, just like yesterday.
Net on the day, the Dow was down 34.29, the S&P 500 down 3.65, and the Nasdaq 100 down 8.20. The Philadelphia Semiconductor Index (SOXX) was down just under 12, and the technicals reflected the negative day today, although it could have been much worse, as the indices came way off their lows.
The NDX, for example, closed 35 points off the low, down 8, at one point down as much as 43, and the S&P 500 closed about 12 , points off the low, and only down 3.65 on the day. At one point it down about 16 points. The Dow was about 150 points off the low.
The technicals confirmed the negative session today with advance-declines negative by 5 to 3 on New York and 2 to 1 on NAsdaq. Up/down volume was 2 to 1 negative on New York on total volume of nearly 2.2 billion. Nasdaq had a 19 to 7 negative ratio on down-volume over up-volume, on heavy volume of 2 2/3 billion.
TheTechTrader.com board was remarkably narrowly mixed, mostly to the downside. There were two outstanding issues, one up, one down. DealerTrack Holdings (TRAK) exploded for 3.66 on heavy volume after a strong earnings report and raised targets at a couple brokers. On the downside, Home Inns & Hotels (HMIN) opened sharply lower, did manage to bounce, but backed off at the close, down 3.17 at 39.04 on 1 1/4 million traded today.
Other than that, no stocks were up or down as much as a point. On the plus side, Rambus (RMBS) was up 39 cents, reversing its earlier losses. The solar energy group had a strong session. Among that group, Ascent Solar (ASTI) was up 89 cents, DayStar Technologies (DSTI) 39 cents, and Energy Conversion Devices (ENER) up 35 cents. Evergreen Solar (ESLR) was down 1 cent, but 90 cents off its low.
Other stocks on the downside, Acorda Therapeutics (ACOR) was down 93 cents, Aluminum Corp. of China (ACH) 76 cents, Fuel Tech (FTEK) 43 cents and Onyx Pharmaceuticals (ONXX) down 71 cents. Sigma Designs (SIGM) gave back 81 cents.
Stepping back and reviewing the hourly chart patterns, as indicated the indices moved sharply lower to new lows for this pullback, but snapped back sharply and held most of the rally for the rest of the session, consolidating in a platform-type pattern for the last several hours.
This could be constructive, but we'll need to get a breakout through key overhead resistance. The levels we'll be watching are 1410-15 zone, which is heavy overhead resistance for the S&P 500, and the 1768-75 zone on the NDX.
Good trading!
Harry
