Closing Analysis

Indices Close Sharply Lower in Late Sell-Off

Closing Technical Market Analysis for Wed June 22nd 2011

The stock market indices suffered a late sell-off and moved sharply into negative territory as a result. The key to today’s action was that several attempts at breaking out above intraday resistance failed, and that resulted in a late rollover. However, if you look at the overall pattern you’ll see that the indices were due for a pullback in this area to fortify and extend the potential basing pattern. All hope is not lost. We’ll have to see what kind of follow-through we get and whether or not lower levels of support are holding on.

Net on the day, the Dow was down 80.34 at 12,109.67, about 100 points off the high. The S&P 500 fell 8.38 at 1287.14, 11 points off its high, and Nasdaq 100 was down 16.07 at 2235.75, 19 points off its high.

Advance-declines moved into negative territory by about 3 to 2 on the New York Stock Exchange and 2 to 1 negative on Nasdaq. Up/down volume was about 2 1/2 to 1 negative on New York with total volume of a light 840 million shares. Nasdaq traded a little less than 1.6 billion and had a 2 to 1 negative ratio on declining volume over advancing volume. board, as a result of all that action, was up in the morning, down in the afternoon. The indices closed mixed, but there were still quite a few winners on our board today. By far, leading the way today was AeroVironment, Inc. (AVAV), up 5.90 to 34.51. ZAGG Incorporated (ZAGG) had a big day, up 2.34 to 14.94. Sky-mobi Limited (MOBI) gained 89 cents to 6.80, Fusion-io Inc. (FIO) 1.25 to 26.25, Coffee Holding Co.Inc. (JVA) 1.35 to 15.35, Molycorp, Inc. (MCP) 1.05 to 54.10, Golar LNG Ltd. (GLNG) 96 cents to 33.01, and OmniVision Technologies Inc. (OVTI) 72 cents to 30.97.

Among other winners today were several Chinese stocks. China GengSheng Minerals, Inc (CHGS) and China Shen Zhou Mining & Resources, Inc. (SHZ), two rare-earth mining stocks, jumped sharply today, with CHGS up 57 cents to 2.10, or 37%, and SHZ up 86 cents to 3.33, or 35% today.

In addition, Spartan Motors Inc. (SPAR) jumped 92 cents to 5.32, up 21%. Achillion Pharmaceuticals, Inc. (ACHN) had a big day, up 1.25 to 7.26, or 21%, and RiT Technologies Ltd. (RITT) advanced 94 cents to 8.33.

On the downside, there were no point-plus losers on our board today except for the large-cap stocks. Goldman Sachs (GS) lost 1.44 to 134.52, Apple Inc. (AAPL) was down 2.69 to 322.61, and Inc. (AMZN) also lost 2.60 to 191.63.

So some of the large-cap stocks suffered particularly late in the session when they reversed from positive to negative.

Stepping back and reviewing the hourly chart patterns, the indices opened lower, but then bounced to resistance on four occasions today before finally rolling over in the last hour, taking the NDX from 2255 to 2235 and the S&P 500 from 1298 to 1287 before closing right near the session low.

It was not a good way to end the session, but still we’re encouraged about the possibilities of a bottoming-type pattern being put in.

Good Trading!


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- Harry Boxer

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