Closing Analysis

Positive Start to the Week

Closing Technical Market Analysis for Mon May 9th 2011

The stock market indices started out the week with positive action. The morning, however, was choppy as the indices moved lower, backed and filled, retested support on the Nasdaq 100 and S&P 500 and held. They then had a strong surge that took the NDX from the 2377 area to 2400. The S&P 500 jumped from 1339 to 1349. Midday they backed and filled and then consolidated, and toward the end of the day they pulled back a little bit.

Net on the day, the Dow was up 45.86 at 12,684.68, the S&P 500 up 6.09 at 1346.29, and the Nasdaq 100 up 7.79 at 2390.97.

Advance declines were 21 to 9 positive on the New York Stock Exchange and 17 to 9 positive on Nasdaq as well. Up/down volume was 2 to 1 positive on New York with total volume a light 770 million. Nasdaq traded just under 1 2/3 billion shares and had about a 3 to 2 positive ratio today. board, as a result, was nearly all higher today, with many gainers on our board. Leading the way was Rosetta Resources, Inc. (ROSE) up 8.38 to 49.48, more than 20%. Sysco Corp. (SYY) jumped 3.06 to 31.57, Vertex Pharmaceuticals Incorporated (VRTX) 3.11 to 57.65, Molycorp, Inc. (MCP) 2.67 to 71.60, and IDT Corporation (IDT) 2.25 to 29.07. Brigham Exploration Co. (BEXP) snapped back 1.01 to 29.34, and Inc. (AMZN) advanced 3.20 to 200.80.

Among other point-plus gainers of note, Jazz Pharmaceuticals, Inc. (JAZZ) was up 1.18 to 30.45, LSB Industries Inc. (LXU) 1.80 to 45.32, and Nuance Communications, Inc. (NUAN) 1.67 to 21.76 after closing a deal with Apple. Travelzoo Inc. (TZOO) gained 1.11 to 74.09, Ultratech, Inc. (UTEK) 1.19 to 31.27, Westport Innovations Inc. (WPRT) 1.51 to 24.70, and Inc. (ACOM) 2.57 to 43.52.

In the low-priced sector, Fuwei Films (Holdings) Co., Ltd. (FFHL) was up 88 cents to 3.66, or 31.7%, and Arotech Corp. (ARTX) jumped more than 50%, up 70 cents to 1.99.

On the downside, the ultra-short ETFs got hammered, particularly the ProShares UltraShort DJ-AIG Crude (SCO) down 4.80 to 42.60. The ProShares UltraShort Silver (ZSL) fell 3.78 to 19.33, 5 points off its high from Friday morning, and the Direxion Daily Small Cap Bear 3X Shares (TZA) lost 1.33 to 34.37. The iPath S&P 500 VIX Short-Term Futures ETN (VXX) dropped 85 cents to 23.99, and te Direxion Daily Financial Bear 3X Shares (FAZ) was unchanged today from 41.25.

Stepping back and reviewing the hourly chart patterns, the indices were choppy in the morning, backed and filled, then rallied late morning to the session highs, pulled back, and then retested those levels. When the levels at 2400 on the NDX and 1349 on the S&P 500 could not be pierced, they backed off into the close.

It’s not a bad way to start the week, although resistance needs to be overcome. We’ll see whether the indices can do that or head lower. Right now the S&P 500 appears to be forming a big wedge pattern near the apex, and tomorrow will be a critical day.

Good Trading!


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- Harry Boxer

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