Closing Analysis

Definitive Down Day

Closing Technical Market Analysis for Wed April 4th 2012

The stock market indices had a definitive-down day. The technicals confirmed with a big gap to the downside, a little bounce, followed by a very sharp sell-off that took them to the lows for the day by mid-day. The indices fell under 2730 on the Nasdaq and to 1394 on the S&P 500. At that point, the NDX was down more than 50 points, but then rallied back, running from 2720 to 2750, and the S&P 500 rallied from 1394 to 1401. They pulled back in the last 5 minutes to close negative on the session.

Net on the day, the Dow was down 124.80 at 13,074.33, the S&P 500 down 14.42 to 1398.96, and the Nasdaq 100 down 37.78 at 2745.00.

Advance-declines were about 5 to 1 negative on the New York Stock Exchange, and 4 to 1 negative on Nasdaq. Up/down volume was nearly 4 to 1 negative on New York, with total volume of 820 million shares traded today. Nasdaq traded about 1.8 billion shares and had a 8 to 1 negative volume ratio. board was nearly all negative today. Leading the way down, Apple Inc. (AAPL) dropped 5.01 to 624.31. Goldman Sachs (GS) lost 2.75 to 119.96. International Business Machines Corp. (IBM) was down 3.45 to 206.05. Netflix, Inc. (NFLX) fell another 2.70 to 110.26, and Rackspace Hosting, Inc (RAX) lost 2.41 to 56.53.

There were several very big gainers today. They included Cleantech Solutions International, Inc. (CLNT), which we traded today. It exploded 3.47 to 5.67, or an amazing 157.8%, 3.9 million shares. THT Heat Transfer Technology, Inc. (THTI) jumped 1.03 to 2.31, or 80 1/2%, on 1.8 million shares. Recon Technology, Ltd. (RCON) ran up 1.04 to 3.13, or 49 1/2%, on 1.5 million shares. SmartHeat Inc. (HEAT) climbed 2.43 to 7.68, or 46%, on 12.3 million shares. Magal Security Systems (MAGS) was up 87 cents to 5.43, or 19%, on 6.2 million shares. LiveDeal, Inc. (LIVE) jumped 82 cents to 4.94, or 20%.

Other gainers of note included American International Group, Inc. (AIG) up 1.65 to 32.52, Liquidity Services, Inc. (LQDT) 2.47 to 46.71, Polypore International Inc. (PPO) 1.53 to 37.03, Embraer SA (ERJ) 1.41 to 33.52, and Guidewire Software, Inc. (GWRE) 1.21 to 29.23.

On the downside, the Direxion Daily Financial Bull 3X Shares (FAS) got hammered for 4.85 to 105.50, and the Direxion Daily Small Cap Bull 3X Shares (TNA) dropped 3.15 to 60.30.

Stepping back and reviewing the hourly chart patterns, the indices had a big gap down and hard, and by mid-day reached the lows for the day. When the S&P 500 failed to confirm the new NDX mid-day lows, a rally occurred, although they did back them off into the close in the last 10 minutes.

Unfortunately, they did crack some support today, and the rally back didn’t get above it. We’ll see if this is just simply a technical snapback, and we’re going lower. It sure appears that way to me.

Good Trading!


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- Harry Boxer

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