Closing Analysis

Very Negative Start to Week RSS

Closing Technical Market Analysis for Mon December 12th 2011

The stock market indices started off very negatively with a big down gap as foreign markets were lower, and international problems continue to pressure markets. All the indices dropped sharply in the morning, with the Nasdaq 100 down 42 points to around 2276, and the S&P 500 down 27 points to 1227. They snapped back, pulled back down again, backed and filled, and multiple tests of the lows were finally successful. Late in the day, they broke out above key resistance, and sputtered into the close to take back a big chuck of the losses. Still, it was a very negative day.

Net on the day, the Dow was down 162.87 at 12,021.39, the S&P 500 down 18.72 at 1236.47, about 9 points off its low, and the Nasdaq 100 down 26.44 at 2292.24, or 18 points off its low.

Advance-declines were 4 to 1 negative on the New York Stock Exchange with 612 up and 2420 down, and 3 to 1 negative on Nasdaq. Up/down volume was more than 10 to 1 negative on New York, with total volume of a light 750 million shares traded today. Nasdaq traded over 1.55 billion shares and had a 4 to 1 negative ratio on declining over advancing volume.

It was a very decidedly negative day on Wall Street. board, as a result, had many point-plus losers, although there were some gainers as well. They included some of the low-priced stocks. Alimera Sciences, Inc. (ALIM) was up 42 cents to 1.82, or 30%; Sun Healthcare Group, Inc. (SUNH) up 55 cents to 3.69, or 18%; and FuelCell Energy Inc. (FCEL) 15 cents to 1.10, or 15%.

Other stocks of note included Netflix, Inc. (NFLX), up 4.37 to 75.26 on take-over news. Endo Pharmaceuticals Holdings Inc. (ENDP) rose 2.03 to 36.04, Edwards Lifesciences Corp. (EW) 3.32 to 67.85, and Travelzoo Inc. (TZOO) 1.75 to 29.00 even.

In addition, the ultra-shorts were very strong today. The Direxion Daily Financial Bear 3X Shares (FAZ) jumped 2.48 to 40.96, the Direxion Daily Small Cap Bear 3X Shares (TZA) 1.12 to 27.97, and the Direxion Daily Large Cap Bear 3X Shares (BGZ) 1.33 to 31.44.

Stocks on the downside included Goldman Sachs (GS) down 3.42 to 98.03, International Business Machines Corp. (IBM) down 2.38 to 192.18, Apple Inc. (AAPL) 1.78 to 391.84, First Solar, Inc. (FSLR) 1.31 to 44.36, Golar LNG Ltd. (GLNG) 1.11 to 43.23, InterDigital, Inc. (IDCC) 1.26 to 41.16, Onyx Pharmaceuticals Inc. (ONXX) 1.63 to 39.00 even, Universal Display Corp. (PANL) also down 39.00 even, down 1.56, Questcor Pharmaceuticals, Inc. (QCOR) 1.56 to 44.03, SodaStream International Ltd. (SODA) 1.32 5to 35.03, SolarWinds, Inc. (SWI) 1.35 to 31.93, and Inc (YOKU) 1.04 to 18.89.

Stepping back and reviewing the hourly chart patterns, the indices gapped down and continued down hard in the morning, bounced around for several hours, and then finally came back at the end of the day when they failed to take them lower and intraday resistance was broken. That created some short-covering, but they weren’t able to get back above the downside gap, particularly on the Nasdaq 100, which right now is around the 2295-96 area.

We’ll see what happens tomorrow.

Good Trading!


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