Closing Analysis

Indices Roll Over

Closing Technical Market Analysis for Tue December 27th 2011

The stock market indices had a nasty day today. The day started out with a sharp move lower early on, followed by a snapback that failed at resistance, and then a move to the morning lows around noon. They tried to snap back in the early afternoon, but formed bear wedges and spiked down and cracked late in the day. They snapped back in the last half hour only to pull back again into the close.

Net on the day, the Dow was down 139.71 at 12,151.64, the S&P 500 down 15.73 to 1249.70, and the Nasdaq 100 down 26.04 at 2267.08.

Advance-declines were 4 to 1 negative on the New York Stock Exchange, and 3 to 1 negative on Nasdaq as well. Up/down volume was more than 20 to 1 negative with 22 million up and 494 million down on New York. Nasdaq traded 2.2 billion shares and had a 9 to 1 negative volume ratio. board, as a result, was vastly lower other than the ultra-shorts, which we highlighted for subscribers earlier today. Leading the way, the VelocityShares Daily 2x VIX ST ETN (TVIX) jumped 2.40 to 32.40, the Direxion Daily Small Cap Bear 3X Shares (TZA) 1.32 to 26.97, the Direxion Daily Financial Bear 3X Shares (FAZ) 1.64 to 38.44, the Direxion Daily Large Cap Bear 3X Shares (BGZ) 1.06 to 30.09, and the iPath S&P 500 VIX Short-Term Futures ETN (VXX) 1.49 to 35.88.

We also picked the ProShares UltraShort Silver (ZSL), up 1.80 to 17.20.

Other gainers of note included low-priced Sequans Communications S.A. Ame (SQNS) up 45 cents to 2.95, or 18%; Endeavour International Corporation (END) up 97 cents to 8.91, or 12%; SemiLEDs Corporation (LEDS) 61 cents to 3.83, or 19%; Delcath Systems, Inc. (DCTH) 44 cents to 3.49, or 14%; and Pacific Ethanol, Inc. (PEIX) 27 cents to 1.15, or 31%.

EnerNOC, Inc. (ENOC) jumped 1.24 to 11.31, HomeAway, Inc. (AWAY) 88 cents to 23.00 even, Cheniere Energy, Inc. (LNG) 39 cents to 8.90, Diamond Foods, Inc. (DMND) 82 cents to 29.40, and Arctic Cat Inc. (ACAT) 3.94 to 22.93.

On the downside, Apple Inc. (AAPL) dropped 3.89 to 402.64, Goldman Sachs (GS) lost 1.78 to 90.12, Molycorp, Inc. (MCP) got hammered for 3.96 to 24.04, and Netflix, Inc. (NFLX) gave back 1.40 to 69.20. Questcor Pharmaceuticals, Inc. (QCOR) lost 1.76 to 41.63, SodaStream International Ltd. (SODA) 1.63 to 32.52, VirnetX Holding Corp (VHC) 1.20 to 25.10, and Silicon Motion Technology Corp. (SIMO) 1.07 to 20.41 on profit taking.

Stepping back and reviewing the hourly chart patterns, the indices had a very nasty session as they stair-stepped their way down all morning, bounced early in the afternoon, but later failed at resistance, and rolled over into the afternoon to new lows for the day.

It was about as negative day as it could get today. It’s getting closer to the new year, so let’s see if the market will start the year off in the plus column.

Good Trading!


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- Harry Boxer

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