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Closing Technical Market Analysis for Thu September 22nd 2011
The stock market suffered a traumatic sharp sell-off today as markets across the world went steeply lower, taking the futures with it. The day started out with the indices having a big down gap, an attempt at a brief rally, and then plunging to morning lows. At this point they had a snapback going from 2181 up to 2200 on the Nasdaq 100, and from 1128 up to the 1142-43 area on the S&P 500. They then stair-stepped their way lower to retest the lows, making lower lows on the S&P 500, but not confirming on the NDX.
They retraced about 50% of the pullback losses, but only to rollover midday to create a very sharp sell-off to take out the low on both indices. It was a short-covering rally in mid-afternoon that then resulted in a sharp rollover to reach 2151 NDX, and 1114 on the S&P 500. At that point, the Nasdaq 100 was down about 105 points, the Dow down about 520, and the S&P 500 down more than 50 points. In the last 40 minutes they exploded back up on short covering.
Net on the day, the Dow was down 391.01 at 10,733.83, which was 136 off the low. The S&P 500 down 37.20 at 1129.56, about 15 points off its low. The Nasdaq 100 down 73.71 at 2184.59, 33 points off its low.
Advance-declines were nearly 9 to 1 negative on the New York Stock Exchange, and about 7 to 1 negative Nasdaq. Up/down volume was more than 20 to 1 negative on New York, with total volume of 1.7 billion shares traded today. Nasdaq traded a heavy 2.83 billion shares and had an almost 13 to 1 negative ratio on declining volume over advancing volume.
TheTechTrader.com board had mostly losers. On the downside, the major losers on our board included Apple Inc. (AAPL), down 10.32 to 401.82, along with First Solar, Inc. (FSLR), which dropped 6.67 to 66.85. International Business Machines Corp. (IBM) lost 4.40 to 168.62, Brigham Exploration Co. (BEXP) 2.60 to 25.71, and Golar LNG Ltd. (GLNG) 2.73 to 31.98.
In addition, Goldman Sachs (GS) gave back 3.88 to 93.98, and traded as low as 91.40 earlier in the day. InterDigital, Inc. (IDCC) fell 2.89 to 55.47, MAKO Surgical Corp. (MAKO) 2.41 to 36.42, MICROS Systems, Inc. (MCRS) 2.35 to 44.45, Universal Display Corp. (PANL) 2.26 to 50.75, and Youku.com Inc (YOKU) 1.90 to 14.31. That’s down from 70 in April.
On the upside, the ultra-short ETFs had another stellar day today. The VelocityShares Daily 2x VIX ST ETN (TVIX) ran right up to 83, or up about 18 points, but closed at 78.70, up 13.20 for the day. The iPath S&P 500 VIX Short-Term Futures ETN (VXX) was up 4.63 to 49.84, the Direxion Daily Small Cap Bear 3X Shares (TZA) up 4.19 to 54.04, the Direxion Daily Financial Bear 3X Shares (FAZ) 5.74 to 71.34, the Direxion Daily Large Cap Bear 3X Shares (BGZ) up 4.10 to 46.99, and ProShares UltraShort Silver (ZSL) 2.44 to 15.02.
Stepping back and reviewing the hourly chart patterns, the indices gapped sharply lower and stair-stepped their way down until late in the afternoon when short covering near support created a bounce back. But still there were very big losses on the indices today, although twice the tick got to negative1400, or more, and that may have caused the late short covering and snapback, not to mention oversold conditions.
Let’s see how it goes tomorrow.
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