Closing Analysis

Indices Roll Over Hard at the Close RSS

Closing Technical Market Analysis for Thu June 24th 2010

The stock market indices suffered another nasty spill as they opened lower, stair-stepped down, made new decline lows, and then from mid-morning to mid-afternoon staged a 3-wave snapback rally. All that did was get back to the declining tops lines and lateral price resistance, where they failed and then rolled over hard at the close.

Net on the day, the Dow was down 145.65 at 10,152.80, the S&P 500 down another 18.35 at 1073.69, and the Nasdaq 100 down 29.33 at 1844.59.

Advance/declines were 4 1/2 to 1 negative on the New York Stock Exchange and 3 1/2 to 1 negative on Nasdaq. Up/down volume was about 10 to 1 negative on New York with total volume of a little over 1.25 billion. Nasdaq was about 8 to 1 negative and traded a total of just right at 2 billion shares. board, as a result, was mostly lower. Leading the way today were the large caps. Google Inc. (GOOG) was down 6.95 at 475.10, Cree Inc. (CREE) lost 1.96 to 64.60, Baidu, Inc. (BIDU) 2.39 to 73.80, Apple Inc. (AAPL) 1.97 to 269.00, Inc. (AMZN) 3.12 to 118.33, Las Vegas Sands Corp. (LVS) 1.05 to 25.99, and Transocean Ltd. (RIG) 3.01 to 49.75.

Lightbridge Corporation (LTBR), which was the big play yesterday, gave back 1.47 to close at 8.02 after reaching over 11 early in the session, a big negative reversal day.

Other decliners of note were China Automotive Systems Inc. (CAAS) down 1.03 at 18.94, and American International Group, Inc. (AIG) down 1.04 at 36.77.

A few stocks managed to eke into the plus column and several of those were portfolio positions. Dendreon Corp. (DNDN) was up 88 cents today at 36.01 after some positive comments at a convention. Research Frontiers Inc. (REFR) jumped 38 cents to 4.58, Neurocrine Biosciences Inc. (NBIX) 19 cents at 5.74, and Spreadtrum Communications Inc. (SPRD) 2 cents at 9.47.

ETFs were strong with the Direxion Daily Emrg Mkts Bear 3X Shares (EDZ) up 2.17 to 44.16, and the iPath S&P 500 VIX Short-Term Futures ETN (VXX) up 1.64 to 28.35. The Direxion Daily Large Cap Bear 3X Shares (BGZ) advanced 75 cents to 16.20, and the Direxion Daily Financial Bear 3X Shares (FAZ) jumped 92 cents to 15.97.

Stepping back and reviewing the hourly chart patterns, the indices had a 3-wave decline in the morning, a 3-wave advance back to test resistance by mid-day, and then a sharp rollover at the end of the day, which closed them not far off the session lows and 4-day lows as well.

At this point the indices are quite oversold and have completed a 5-wave decline that could result in a better snapback at some point in the next day or two, but with tomorrow being Friday we may see some additional weakness before it’s over.

Good Trading!


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- Harry Boxer

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