Closing Analysis

Bottoming Area, Or Just a Bounce? We'll See...

Closing Technical Market Analysis for Wed May 9th 2012

The stock market indices ended lower today, although they did come way off the early steep losses.

The day started out, with a big gap down at overnight news from Europe, they bounced early on, and then rolled over to lower lows, taking out the S&P 500 recent lows. However, the NDX did not make lower lows. When that occurred, they rallied back sharply, taking back more than three-quarter of the losses. They backed and filled the rest of the afternoon, making nominal new highs mid-day, but couldn’t push through, and backed off. They did try a late rally, but in the last 10-15 minutes, they rolled over, and closed down on the session.

Net of the day, the Dow was down 97.03 at 12,835.06, the S&P 500 down 9.14 at 1354.58 even, 11 points off the low, and the Nasdaq 100 down 8.52 at 2621.35, about 34 points off its low.

Advance-declines were a little worse than 2 to 1 negative on the New York Stock Exchange, and about 2 to 1 negative on Nasdaq as well. Up/down volume was a little worse than 2 to 1 negative on New York, total volume 925 million. Nasdaq traded just under 2 billion, and had a 10 to 9 negative volume ratio. board was mixed, but there were quite a few gainers. Leading the way today was SodaStream International Ltd. (SODA), up 7.71 to 36.90, or 26.4%, on 12.8 million shares, on strong earnings. Low-priced Fonar Corp. (FONR) gained 68 cents to 4.95, or 16%. Accretive Health, Inc. (AH) advanced 1.69 to 10.54, or 19%, on 4.8 million shares. MetroPCS Communications, Inc. (PCS), on merger rumors, popped 94 cents to 7.50, or 14%, on 33 million shares.

Tangoe, Inc. (TNGO) ran up 2.67 to 21.97, or 14%, on 1.9 million shares. Blue Nile Inc. (NILE) advanced 2.92 to 30.20, or 10.7%, on 1.25 million shares. EZchip Semiconductor Ltd. (EZCH) up 4.71 to 43.14, or 12%, on 1 million shares. Quest Software Inc. (QSFT) up 2.33 to 25.17, or 10%, on 5.7 million shares.

DealerTrack Holdings, Inc. (TRAK) up 1.86 to 30.69, Phillips 66 (PSX) 2.39 to 32.49, and Tempur Pedic International Inc. (TPX) 2.20 to 48.79.

Liquidity Services, Inc. (LQDT) was up 2.52 to 65.26, Vitamin Shoppe, Inc. (VSI) 2.46 to 54.07

Other gainers of note included Apple Inc. (AAPL), up 1.00 even, after trading 9 points lower earlier in the session, to 569.18. Netflix, Inc. (NFLX) was up 1.56 to 74.35, 3 points off its low.

The ProShares Ultra VIX Short-Term Futures ETF (UVXY) gained 1.10 to 15.44.

The Direxion Daily Small Cap Bull 3X Shares (TNA), however, was down 1.03 to 52.90, and the Direxion Daily Financial Bull 3X Shares (FAS) gave back 2.85 to 93.79.

Stepping back and reviewing the hourly chart patterns, the indices were down sharply in the morning, rallied back nicely to take back the vast majority of the gains, nearly all of it on the Nasdaq 100, and then backed off a little bit into the close to finish in the red on the day.

Whether this is a bottoming area, or just a bounce off technical support, which it appears to be, we’ll have to see in the next few days.

Good Trading!


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- Harry Boxer

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