Closing Analysis

Late Rally Spurs Blue Chips Back into Plus Column RSS

Closing Technical Market Analysis for Tue June 8th 2010

The stock market indices managed to rally late in the session and take back most of the losses, putting the Dow and the S&P 500 back in the plus column, but Nasdaq had a weak session, closing in the negative column.

The day started out with a move slightly to the upside and then immediately turned lower. By mid-morning they were at the session lows, and then they snapped back sharply right to resistance, could not get through, came down in the early afternoon and retested the lows on two occasions and then bounced again. They made lower lows, then rolled over one more time, were not able to penetrate the lows at this time, made higher lows, and then came on strong at the close.

Net on the day, the Dow was up 123.49 at 9939.98. The S&P 500 took out key resistance at the 1060 zone, closing at 1062, up 11.53, but the Nasdaq 100 trailed and closed at 1795.70, down 2.46, off the session highs and under resistance at 1800.

We’ll see what that means tomorrow and whether they’re at a stopping point or attempting to base in this zone from oversold conditions, but certainly a lot of stocks turned around at the end of the session.

Advance-declines were about 3 to 2 positive on the New York Stock Exchange and 3 to 2 negative on Nasdaq. Up/down volume was a little more than 3 to 2 negative on both New York and on Nasdaq. board, as a result, was narrowly mixed for the most part, other than a few issues. New portfolio position, Pactiv Corp. (PTV), which we added today, closed at 29.50, up 1.47 on 7 1/2 million shares, breaking out today. Las Vegas Sands Corp. (LVS) had a terrific session today, up 1.24 at 23.96, just a nickel off its high on 51 million shares. Those were the only point-plus gainers on the board.

Other stocks of note, Valassis Communications Inc. (VCI) gained 86 cents at 33.85, and RINO International Corporation (RINO) 45 cents at 11.63, but other than that very few stocks were up on our board today.

The ultra-short ETFs had a negative session today for the most part. The Direxion Daily Emrg Mkts Bear 3X Shares (EDZ) dropped 3.67 to 52.09, the Direxion Daily Financial Bear 3X Shares (FAZ) 82 cents to 16.55, Direxion Daily Large Cap Bear 3X Shares (BGZ) 48 cents to 17.06, and the iPath S&P 500 VIX Short-Term Futures ETN (VXX) 1.13 to 31.14.

The Direxion Daily Small Cap Bear 3X Shares (TZA), however, managed to gain a nickel to 8.18 diverging today.

Other stocks of note on the downside, Xyratex Ltd. (XRTX) gave back 59 cents at 13.82, Coinstar Inc. (CSTR) 56 cents at 50.45, and Acme Packet, Inc. (APKT) 77 cents at 25.24.

Stepping back and reviewing the hourly chart patterns, the indices came down in the morning and then bounced back by midday only to roll over again in the afternoon and retest. A late, 3-wave rally brought them back up in the afternoon, as today turned out to be a consolidation day with a late rally that could trigger some more upside tomorrow.

We’ll see if resistance will give way or whether it will become formidable enough to turn the indices back lower.

Good Trading!


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- Harry Boxer

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