Closing Analysis

Indices Roll Over

Closing Technical Market Analysis for Wed May 11th 2011

The stock market indices suffered pretty strong losses today on confirming technicals. The day started out with a move up on the Nasdaq 100, but the S&P 500 barely moved. At that point they pulled back, went to lower lows on the S&P 500, but they did not break them on the Nasdaq 100. When the NDX finally did rollover late morning, it took the S&P 500 and the Dow with it, coming down sharply, bouncing, and then setting the session lows in early afternoon. A 5-wave advance back on the NDX brought them back in about a .382 Fibonacci retracement, but they barely bounced back on the S&P 500.

Net on the day, the Dow was down 130.33 at 12,630.03, the S&P 500 down 15.08 at 1342.08, and the Nasdaq 100 down 18.27 at 2393.08.

Advance-declines were 3 to 1 negative on the New York Stock Exchange and 3 1/2 to 1 negative on Nasdaq. Up/down volume was a little less than 6 to 1 negative on New York with total volume of 940 million. Nasdaq traded 2 1/4 billion shares and had a 3 1/2 to 1 negative plurality on declining volume over advancing volume. board had some advances today, particularly in the ultra-short ETF sector, although there were other gainers as well. Rovi Corporation (ROVI) was up 8.80 to 58.48 on big earnings today. Global Crossing Ltd. (GLBC) gained 2.44 to 29.15, low-priced Top Image Systems Ltd. (TISA) rose 86 cents to 2.20, a 67% gain today, and Globecomm Systems Inc. (GCOM) was up 1.38 to 14.67. Quantum Fuel Systems Technologies Worldwide Inc. (QTWW) advanced 98 cents to 4.51, a 28% gain there, while Coffee Holding Co.Inc. (JVA) added 55 cents to 6.95, and Macy's, Inc. (M) jumped 2.03 to 28.36 today after reporting earnings. Procera Networks, Inc. (PKT), up 1.25 to 11.17, rounded out the point-plus gainers today.

In the ultra-short ETF sector, with oil down sharply, the ProShares UltraShort DJ-UBS Crude Oil (SCO) was up 3.34 to 45.54, and the ProShares UltraShort Oil & Gas (DUG) up 1.63 to 29.92. The ProShares UltraShort Silver (ZSL) was up 2.91 to 21.70, and the Direxion Daily Small Cap Bear 3X Shares (TZA) up 1.77 to 34.62, with the Direxion Daily Financial Bear 3X Shares (FAZ) advancing 1.38 to 41.49.

On the downside, Goldman Sachs (GS) lost 2.52 to 147.88, Apple Inc. (AAPL) was down 2.22 to 347.23, Molycorp, Inc. (MCP) gave back 3.81to 62.66 in a continued post-lockup, and Tesla Motors, Inc. (TSLA) dropped 1.26 to 27.07.

In addition, ServiceSource International, In (SREV) fell 1.20 to 18.06, Rackspace Hosting, Inc (RAX) got hammered for 3.41to 41.32, LSB Industries Inc. (LXU) lost 1.02 to 45.09, and Brigham Exploration Co. (BEXP) continued the pullback, down 1.60 to 28.11.

Stepping back and reviewing the hourly chart patterns, the indices, after an early negative opening on the S&P 500, tried to bounce, with the NDX doing much better than the SPX. They rolled over hard, by midday reaching the session lows. They did bounce back in the afternoon, but barely, probably just a technical move.

Key support just underneath here will be key. We’ll be watching closely the 2418-20 zone on the Nasdaq 100 and 1328-30 zone on the S&P 500.

Good Trading!


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