Closing Analysis

Turnaround Tuesday to the Upside

Closing Technical Market Analysis for Tue October 18th 2011

The stock market had a turn-around Tuesday to the upside. The indices came down hard early on, held key support around 1190-91 on the S&P 500, and the 2310-15 zone on Nasdaq 100. They rallied nicely in a strong 3-wave rally, and then midday consolidated bullishly on the Nasdaq 100, but made higher highs on the S&P 500. That kind of worried us, because we weren’t getting confirmation from the NDX. However, late in the session when rumors hit that Germany and France got together for a $2 trillion Europe bailout plan for the banks, the market exploded. The NDX ran, literally, from 2343 to 2375, and the S&P 500 jumped from 1214 to 1233.

They backed off, came on again, and then backed off again, and backed and filled, with the indices closing off the highs of the day.  Net on the day, the Dow was up 180.05 at 11,577.05, reaching as high as 11,652, or 75 points off the high. At one point it was up 255 points, but still it was a very strong close. The S&P 500 was up 24.52 at 1225.38, and the Nasdaq 100 up 30.49 at 2364.87.

Advance-declines more than 5 to 1 positive on the New York Stock Exchange, and 3 1/2 to 1 positive on Nasdaq. Up/down volume was almost 13 to 1 positive on New York, with nearly 1 billion shares up and 77 million down with total volume of a little less than of 1.7 billion shares traded today. Nasdaq traded more than 1.83 billion shares and had a 5 to 1 positive ratio on advancing volume over declining volume.

Wall Street had a very strong day today, and after the ugly day we had yesterday, we sure needed today’s action. board was mostly positive today, to say the least. Apple Inc. (AAPL), which was coming out of earnings after the close, sold off into the close after coming within a point of its all-time high. It closed up 2.25 to 422.24, on nearly 26 million shares traded today. We’ll have to see how it goes in the aftermarket.

In addition, First Solar, Inc. (FSLR) was up 2.95 to 55.91, Molycorp, Inc. (MCP) up 2.54 to 39.69, 2.72 to 50.81, Travelzoo Inc. (TZOO) 1.52 to 29.52, Silicon Motion Technology Corp. (SIMO) 1.00 to 15.11, and InterDigital, Inc. (IDCC) 1.58 to 47.74.

Some low-priced stocks had a big day today. Halozyme Therapeutics, Inc. (HALO) was up 1.15 to 7.35, or 18 1/2%, on 3 million shares. Kodiak Oil & Gas Corp. (KOG) gained 65 cents to 6.18, or 12%, on 12.3 million shares. Human Genome Sciences Inc. (HGSI) rose 1.57 to 12.82, or 14%, on 23.3 million shares. Orsus Xelent Technologies Inc. (ORS) advanced 62 cents to 2.00 even, or 45%, on 813,000 shares, which sounds low, but their average volume is 82,788 shares traded. Agenus Inc. (AGEN) increased 58 cents to 3.30, or 21.3%, on 1 million shares, and AK Steel Holding Corporation (AKS) 91 cents to 8.06, or 12.7%, on 18.7 million shares.

Stocks in the strong home building sector included Toll Brothers Inc. (TOL), up 1.93 to 17.07, and KB Home (KBH) up 73 cents to 7.02.

The financial sector had a strong day today, with Goldman Sachs (GS) was up 5.35 to 102.25, Wells Fargo & Company (WFC) up 1.44 to 25.86, JPMorgan Chase & Co. (JPM) up 1.83 to 32.87, and Morgan Stanley (MS) 1.38 to 16.63.

Other stocks of note included OmniVision Technologies Inc. (OVTI) up 33 cents to 15.93, Pilgrim’s Pride Corporation (PPC) up 47 cents to 4.66, or 11% on 4 million shares, and Swift Transportation Co., LLC (SWFT) up 81 cents to 8.58, or 10.4%, along with Brown & Brown Inc. (BRO) 1.74 to 19.67, or 9.7%.

Ultra-long Direxion Daily Small Cap Bull 3X Shares (TNA) was up 3.26 to 42.39.

On the downside, the ultra-shorts got hammered. VelocityShares Daily 2x VIX ST ETN (TVIX) was down 4.70 to 55.34, the Direxion Daily Financial Bear 3X Shares (FAZ) down 7.41 to 48.80, the Direxion Daily Small Cap Bear 3X Shares (TZA) down 3.26 to 36.50, the iPath S&P 500 VIX Short-Term Futures ETN (VXX) 1.66 to 43.00, the Direxion Daily Emrg Mkts Bear 3X Shares (EDZ) 1.87 to 22.46, and the Direxion Daily Large Cap Bear 3X Shares (BGZ) 2.21 to 35.39.

The ProShares UltraShort DJ-UBS Crude Oil (SCO) fell 2.31 to 50.69.

Stepping back and reviewing the hourly chart patterns, a very strong rally ensued today, although some late profit-taking brought them back from new multi-month highs on the S&P 500 at as high as 1223 today.

Let’s see how it goes tomorrow.

Good Trading!


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