Closing Analysis

Negative Day On Wall Street..Necklines Broken

Closing Technical Market Analysis for Thu June 21st 2012

The stock market indices did not fare well today. It was a very bad day on Wall Street as the markets were pounded with economic news, both domestic and abroad, as well as bank downgrades.

The day started out poorly. The indices opened lower, and then moved down to support a bounce from bear flags. At that point, I noted to subscribers that we were likely headed lower. We came down and broke three layers of support, and closed at the lows for the day going away.

Net of the day, the Dow was down 250.82 at 12,573.57, about 8 points off its low, the S&P 500 was down 30.18 at 1325.51, and the Nasdaq 100 down 66.37 at 2556.96.

It was a very, very negative day on Wall Street.

Advance-declines were nearly 5 to 1 negative on New York, and 4 to 1 negative on Nasdaq. Up/down volume was about 7 to 1 negative on New York, total volume about 860 million shares. Nasdaq traded 1.75 billion, and had a 7 to 1 negative volume ratio. board was mostly negative. Leading the way to the downside, Google Inc. (GOOG) lost 12.30 to 565.21. Apple Inc. (AAPL) lost 8.07 to 577.67, breaking below key 580 support. Inc. (AMZN) was down 2.45 to 220.57. Netflix, Inc. (NFLX) dropped 2.32 to 65.84. Goldman Sachs (GS) was down 2.65 to 93.90 in a very weak banking group. International Business Machines Corp. (IBM) lost 5.39 to 193.39.

Those are just some of the point-plus losers on our board today.

The Direxion Daily Financial Bull 3X Shares (FAS) lost 5.69 to 81.69, and the Direxion Daily Small Cap Bull 3X Shares (TNA) was down 3.73 to 47.67.

On the plus side, Onyx Pharmaceuticals, Inc. (ONXX), which we traded for 4 points today, announced approval for a drug, and stayed up pretty much all day, up 19.20 to 63.78, or 43%, on 22 million shares. Pharmacyclics Inc. (PCYC) jumped as high as 48.57, but pulled back to 47.00, up 2.00, on 2.7 million shares. Arena Pharmaceuticals, Inc. (ARNA) had an up day, up 1.18 to 11.68, or 11%, on nearly 60 million shares.

ProShares UltraShort Silver (ZSL) jumped 5.57 to 71.10, or 8 1/2%, on 1.3 million shares, which is big volume for that stock. ProShares Ultra VIX Short-Term Futures ETF (UVXY) snapped back 2.38 to 13.43, or 21 1/2%, on 20.7 million shares.

Other gainers of note included low-priced Eagle Bulk Shipping, Inc. (EGLE), up 93 cents to 3.91, or 31%, on 1.4 million shares. Federal Signal Corp. (FSS) advanced 89 cents to 5.63, or 19%, on 1.3 million shares. Ligand Pharmaceuticals Inc. (LGND) jumped 1.94 to 16.49, or 13%, on 1.4 million shares.

Osiris Therapeutics, Inc. (OSIR) was up another 51 cents to 11.59, and many of the other biotech stocks were higher today in a very weak market.

So it was a strong day for biotech stocks today.

Stepping back and reviewing the hourly chart patterns, the indices came down in the morning, then basically stair-stepped their way lower in distinct falling channels and wedges all day, each rally failing at resistance. Not one time did we get 15 minutes of rallying during the session, other than the quick one in the morning. It was a very bad day, but what is distressing about today is that the necklines on the recent head-and-shoulder patterns that were broken to the upside, rolled over hard through those necklines, and closed right near key secondary support. So the bulls better step in tomorrow, or this market will get hammered lower.

We’ll see what happens tomorrow.

Good Trading!


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- Harry Boxer

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