Tuesday was another nasty day on Wall Street. After yesterday's strong rally late in the day, the indices opened firm , but quickly pulled down hard. However, for the first couple hours they backed and filled in what looked like promising ^ potentially bullish consolidation patterns. Then late morning the indices cracked the morning lows, that set off and triggered a slide that saw a steady stair-step decline for the rest of the session. There was a rather sharp mid-afternoon rally, but that failed at intraday declining tops lines and lateral price resistance and rolled over hard into the last couple hours, closing right at the lows going away.
Net on the day the Dow was down 508, the S&P 500 more than 60, and the Nasdaq 100 more than 81. The Philadelphia Semiconductor Index (SOXX) was down 16.73. That was about a 6 percent loss.
Advance-declines were decidedly negative by about 28 to 4 on New York and 24 to 5 1/2 on Nasdaq. Up/down volume was about 18 to 1 negative on New York, with just 73 million in advancing volume and 1.65 billion to the downside. Nasdaq had some VERY negative numbers to the downside , nearly 2 3/4 billion shares traded to the downside and 88 1/2 million to the upside, a ratio of more than 30 to 1 negative.
That's as climactic as it gets. Although we thought Monday was bad, today was even worse. Total volume, however, wasn't extremely heavy, but it was strong.
TheTechTrader.com board as you can imagine was extremely negative with many multiple point losers. Leading the way was Energy Conversion Devices (ENER), down 10.38. That was 3 1/2 points off the low. (Apple) AAPL was down nearly 9 today at 89.16, closing just off the lows. Canadian Solar (CSIQ) fell 3.07, DryShips (DRYS) 5.40, JP Morgan (JPM) 4.68, Morgan Stanley (MS) 5.85, Mosaic (MOS) 3.25, Sequenom (SQNM) 2.74, Continental Air(CAL) 2.61, and United (UAUA) down 1.68.
We could go on and on, as there were many point-plus losers.
On the plus side, the QID was up 6.88 and SDS up 8.18, as those are ultrashort instruments. The DUG, the ultrashort oil & gas ETF, was up 5.19 today to 54.19, and the USO gained 94 cents.
Stepping back and reviewing the hourly chart patterns yesterday's promising rally failed by mid-day and rolled over hard into the afternoon, taking out yesterday's lows and closing near the lows for the day going away, with the S&P 500 closing under 1000 for the first time in 5 years.
With the close as negative as it was, I would not be surprised to see a strong spillover tomorrow morning. At this point the oscillators and the VIX are at climactic type levels. As I indicated last week I thought we would see an important low early in the week, and we thought yesterday was the low we were looking for, but apparently we have some more to go before we are finished. However, we're getting awfully close.
Good trading!
Harry
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