Closing Analysis

Another Strong Session RSS

Closing Technical Market Analysis for Wed October 20th 2010

The stock market indices had another very good session today. They gapped up at the opening, ran to resistance, backed off resistance, but held support. They then came on and blew through resistance to tag 2100 on the Nasdaq 100 and just under 1183 on the S&P 500. In the afternoon they backed and filled, rolled over in the last hour and gave back a big chunk on it, but still ended up on the day.

Net on the day, the Dow was up 129.35 to 11,107.97, the S&P 500 up 12.27 to 1178.17, and the Nasdaq 100 up 16.02 to 2085.75.

It was an excellent day on advance-declines, which were better than 3 to 1 positive on the New York Stock Exchange, and 2 1/2 to 1 positive on Nasdaq. Up/down volume was 3 1/2 to 1 positive on New York, with total volume of just under 1.1 billion. Nasdaq traded just about 2 billion and had a less than 3 to 1 positive ratio on advancing over declining volume. board had an excellent session with many point-plus gainers today. Leading the way were several low-priced stocks. China Shen Zhou Mining & Resources Inc. (SHZ) was up 1.93 to 4.13, a big percentage gain there. United Rentals Inc. (URI) advanced 1.60 to 17.60, and Motricity Inc. (MOTR) 1.43 to 16.73.

SXC Health Solutions Corp. (SXCI) jumped 2.41 to 39.30, Check Point Software (CHKP) 1.63 to 40.19, JinkoSolar Holding Co. (JKS) 1.01 to 28.68, and Gilead Sciences (GILD) 1.66 to 38.39.

Netflix Inc. (NFLX), which jumped 3.82 to 153.15, was trading at 165 in the aftermarket after releasing earnings, so up 15 points on the day. Other gainers of note, Apple Inc. (AAPL) added 1.04 to 310.53, trading as high as 314.25 during the day, and Goldman Sachs (GS) was up 2.88 to 159.60, tagging and passing 160 at one point.

Those were the point-plus gainers today. Other gainers of note were Logitech International SA (LOGI), a swing trade pick of ours, up 42 cents to 19.26. Myriad Genetics Inc. (MYGN) gained 74 cents to 19.81. Neurocrine Biosciences Inc. (NBIX), a swing trade position, rose 69 cents to 8.53, a new multi-year high, and Polypore International Inc. (PPO), one of our Top 25 members, was up 80 cents to 33.74. Trina Solar Ltd. (TSL) snapped back 84 cents to 27.10.

On the downside, the Direxion Daily Emerging Markets Bear 3X Shares (EDZ) was down 1.22 to 24.41, while the iPath S&P 500 VIX Short-Term Futures ETN (VXX) lost 73 cents to 13.75 and Direxion Small Cap Bear 3X Shares (TZA) 72 cents to 22.76.

Cree Inc. (CREE), one of our Boxer Shorts, was the big loser today, down 2.92 to 50.08 after trading as low as 47.81 on disappointing earnings.

Stepping back and reviewing the hourly chart patterns, the indices gapped up, pulled back, and then ran hard to new snapback highs, but fell short of last week’s 2010 highs on the NDX, which were about 5 points above today’s high. The SPX fell a couple points short of its high, and did back off late in the session, so we’ll have to see what significance that has.

In any case, another strong session for the indices, and technicals confirmed it.

Good Trading!


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- Harry Boxer

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