Closing Analysis

Downtrend Continues

Closing Technical Market Analysis for Wed June 15th 2011

The stock market indices, after  yesterday’s big move up, had an equally, if not worse, move down today in an extremely negative session.

Looking at the charts on an hourly basis, it’s apparent that the Nasdaq 100 and S&P 500 failed near overhead resistance. Negative economic news contributed to a disastrous start. The indices then snapped back more on the NDX than the S&P 500, before going into a bearish-looking consolidation. They rolled over hard, and by midday were near the session lows on the SPX. The NDX and the SPX then consolidated for a couple hours, but when no rally was able to materialize, and overhead resistance was unable to be penetrated, they reached new session lows within the last 45 minutes only to bounce into the close.

The bounce pared back the losses, but still it was a very negative day, with the Dow down 178.84 at 11,897.27 below 11,900 today, the S&P 500 down 22.45 at 1265.42, and the Nasdaq 100 down 41.33 at 2209.01.

Advance-declines were about 5 to 1 negative on the New York Stock Exchange and 4 to 1 positive on Nasdaq. Up/down volume was about 12 to 1 negative on New York with 71.4 million up and 900 million down. Nasdaq traded 1.8 billion down and 181 million up with about a 10 to 1 negative ratio. board, as a result, had a very negative day, although there were some winners as well. Leading the way today was NeurogesX, Inc. (NGSX) up 1.04 to 2.66, up 64%, Sino Clean Energy Inc (SCEI) 39 cents to 1.68, NF Energy Saving Corp. (NFEC) 51 cents to 2.90, Express-1 Expedited Solutions Inc (XPO) 42 cents to 2.95, China Medical Technologies Inc. (CMED) 89 cents to 8.97, Hollysys Automation Technologies, Ltd (HOLI) 1.09 to 10.78, up 11%, and Clean Diesel Technologies Inc. (CDTI) 59 cents to 6.26.

The ultra-short ETFs had a very big day today with ProShares UltraShort DJ-UBS Crude Oil (SCO) up 3.30 to 48.55 on weaker oil, with the high at 49.79 at one point. The Direxion Daily Small Cap Bear 3X Shares (TZA) rose 2.16 to 41.87, and the Direxion Daily Financial Bear 3X Shares (FAZ) was the big winner in the index sector, up 2.92 to 51.22. The iPath S&P 500 VIX Short-Term Futures ETN (VXX) gained 1.91 to 24.43.

On the downside, large-cap stocks took a hit with Apple Inc. (AAPL) down 5.69 to 326.75, near key multi-month support. Inc. (AMZN) dropped 3.98 to 185.98, Goldman Sachs (GS) 2.25 to 134.85, Cree Inc. (CREE) 1.32 to 36.38, IDT Corporation (IDT) 1.12 to 24.95, International Business Machines Corp. (IBM) 1.79 to 162.33, NXP Semiconductors NV (NXPI) 1.38 to 24.01, OmniVision Technologies Inc. (OVTI) 1.60 to 30.57, and Tesla Motors, Inc. (TSLA) 1.28 to 27.32.

Those were only the point-plus losers on our board today. The vast majority, more than 90%, were losers.

Stepping back and reviewing the hourly chart patterns, the indices had a big gap down to start the day. A snapback resulted, and then they rolled over hard to new session lows and kept sliding into the afternoon, although they tried to stabilize on the S&P 500, though certainly were not able to get over initial resistance.

The downtrend continues, although we oversold here and at the bottom of the channel. Perhaps we’ll see something in the next 24 hours to the upside.

Good Trading!


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