Closing Analysis

Moderate Pullback

Closing Technical Market Analysis for Wed September 22nd 2010

The stock market indices did suffer a pullback, but the losses were moderate. The day started out with a move to the upside, a strong surge that snapped back to resistance but failed quickly, and rolled them down hard. By late morning they reached the session lows on the Nasdaq 100 and S&P 500 at 1973 and 1132, respectively.

They then snapped back to resistance, rolled over and retested, and when that was successful they ended up firming up even further. But the afternoon snapback could not get through more important key overhead resistance around 1985 NDX and 1138 SPX, which resulted in a pullback towards the end to keep the indices in the negative column.

Net of the day, the Dow was down just 21.72 at 10,739.31, about 66 points off its high. The S&P 500 fell 5.50 to 1134.28, 10 points off its high, and the Nasdaq 100 lost 6.35 to 1982.76, 14 points off its high.

Advance-declines were about 3 to 2 negative on the New York Stock Exchange, and 2 to 1 negative on Nasdaq. Up/down volume was 2 to 1 negative on New York on total volume of 940 million shares. Nasdaq had about a 2 1/2 to 1 negative ratio on total volume of about 2.2 billion shares traded today. board was mostly lower, although there were some outstanding stocks on the plus side. Leading the way today in terms of percentage gain was low-priced Satyam Computer Services Ltd. (SAY), up 1.08 to 6.61.

Other gainers of note were Apple Inc. (AAPL), up 3.98 to 287.75, and ultra-short Direxion Daily Small Cap Bear 3X Shares (TZA), up 1.04 to 28.58. Netflix, Inc. (NFLX), one of our day trades today, had a spectacular day, jumping 9.73 to 156.93. It closed 4 cents off its high for the day at new all-time highs. Inc. (AMZN) advanced 1.10 to 151.83, Trina Solar Ltd. (TSL) 77 cents to 26.63, and McMoRan Exploration Co. (MMR), a current swing trade pick, 75 cents to 15.96. The Direxion Daily Financial Bear 3X Shares (FAZ) gained 56 cents to 13.28.

Stepping back and reviewing the hourly chart patterns, the indices were down in the morning, stabilized mid-day, tried to rally late in the afternoon, but backed off in the last hour or two to close negative on the session.

On the hourly charts, price and moving average support are still holding, but we’ll be watching carefully tomorrow the 1130 area on the S&P 500 and the 1972 zone on the Nasdaq 100. That is key important short-term support in our opinion.

Good Trading!


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- Harry Boxer

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