Weak Wednesday
By Harry Boxer, The Technical Trader (
www.thetechtrader.com)
The indices had a very disappointing session, and the turnaround Tuesday turned into a weak Wednesday. The day started out firm but backed off rather quickly, backed and filled, tried to retest the highs on a couple occasions, but resistance was very formidable today. They rolled over mid-day, bounced early afternoon, attempted to hold key short-term support, but when that broke they cascaded lower, and ended up spiking down in the last half hour into the close, closing at the lows for the day going away.
The Dow was down nearly 237 points, the S&P 500 down more than 29, and the Nasdaq 100 more than 52. The Philadelphia Semiconductor Index (SOXX) was down 15.51, more than 4 percent today.
The technicals were negative by more than 2 to 1 on advance/declines in New York and 2 1/2 to 1 on Nasdaq. Up/down volume was even worse, as declining volume was 5 times greater than advancing volume on New York with total volume of just under 1.5 billion. Nasdaq traded 2.1 billion, with more than a 6 to 1 negative ratio advancing/declining volume.
So, unfortunately some early strong gains on some of the stocks we follow were given back and then some. As a result TheTechTrader.com board was mixed but mostly lower, although because of the reversal day many stocks we follow ended up only fractionally lower on the session .
Leading the way on the plus side were the reverse ETFs, with the SDS up 2.89 and the QID 1.73. Portfolio position DUG closed at 32, up 1.02, on 29 1/2 million shares. That was 2 1/2 points off the early low when it was down 1 1/2 points, so a big reversal there to the upside.
Pyramid Oil (PDO), a recent hot oil play which had gotten slam-dunked recently, losing two-thirds of its value in two weeks, snapped back 1.32 today, but that was a small amount compared to its recent losses. Portfolio position Sequenom (SQNM) had a terrific day, going to new 6-year highs, reaching near our target at 19. It tagged 18.88 today before reversing in the afternoon sell-off. Still, closing at 17.92, up 71 cents on the day, was an accomplishment, considering most of the other stocks.
But the standout of the day on the plus side was A-Power Energy (APWR), which we traded earlier in the session. It closed at 26.44, up 3.55 on the announcement of a new plant, on 1.8 million traded.
On the downside, point-plus losers were Energy Conversion Devices (ENER), down 1.64, and the QQQQ, down 1.22. Other than that, there were no point-plus losers on our board today.
Stepping back and reviewing the hourly chart patterns, the indices as indicated earlier failed to extend the rally, rolled over mid-session, tried to snap back but failed right at intraday declining moving average and declining tops lines, then rolled over hard in the afternoon, closing at the lows for the day going away, a very bad sign for the bulls. With the S&P 500 now at a nearly full retest of yesterday's lows, and the full decline lows, they are in jeopardy of taking them out and making lower lows.
The NDX is still about 20 points away from its low, so it might not easily get confirmation. We'll be watching the action over the next couple days to see if we can get some stabilization in this zone, or whether they're going to take out support and make lower lows.
Good trading!
Harry
