By Harry Boxer, The Technical Trader
The markets had another very negative start to the week, much like we've seen over the last few months.
The day started out with negative pre market futures, but they weren't too bad. However, The market just opened lower and kept going down.
By mid-morning they reached a level from which they tried to stabilize. After a couple hours of backing and filling all they could muster were bear flags. When those patterns broke ,the market accelerated lower & by mid-day, reached new session and 5-day pullback lows on the Nasdaq 100 and S&P 500, near the bottom of their down-channels.
That resulted in a late snapback, much more so on the Nasdaq 100. The S&P 500 barely cooperated, though in the last 10-15 minutes it finally did come back on.
Net on the day the Dow was down 125, the S&P 500 down 20, and the Nasdaq 100 down nearly 22. The Philadelphia Semiconductor Index (SOXX) was off 6.19, about 3 percent.
Advance-declines were negative by a little more than 3 to 1 on both New York and on Nasdaq. New York had volume of 141 million up and 1.15 billion down, a ratio of about 8 to 1 negative on light total volume of about 1.3 billion. Nasdaq traded about 1 3/4 billion and had about a 7 to 1 negative volume ratio.
TheTechTrader.com board, as you can imagine, was very negative. Leading the way to the downside today were the agriculture stocks, which got hammered. Potash (POT) fell 9.93 at 74.09, CF Holdings (CF) down 6.98 to 46.93, Mosaic (MOS) lost 4.23 to 34.56, and Agrium (AGU) gave back 3.45 to 31.98.
Other stocks of note on the downside, SunPower (SPWR) was down 3.77 to 34.89 in a generally weak solar sector. Canadian Solar (CSIQ) dropped 88 cents to 5.92, and Solarfun (SOLF) fell 61 cents to 5.31. Energy Conversion Devices (ENER) dropped 2.30 to 26.43.
Financials were weak with Bank of America (BAC) down 1.56 to 11.43. Although Morgan Stanley (MS) closed down 27 cents, although that was 2 1/4 off its earlier high.
One of the lone standouts today was A-Power Energy (APWR), which had positive pre-market news, gapped up and ran up 93 cents on the session, on more than 4 million shares.
Other than that just a couple fractional gains, with Cogent (COGT) up 17 cents, portfolio position TSYS up 11 cents, and Rambus (RMBS) 30 cents, snapping back from last week's steep losses.
The ultrashort instruments did very well today, with Direxion Large Cap Bear 3X Shares (BGZ) up 4.57 to 63 1/2 and the Ultrashort QQQQ ProShares (QID) up 2.16 to 57.45.
A new one we're following, the UltraShort Financials (FAZ), gained 6.55 to 48.20 today.
Stepping back and reviewing the hourly chart patterns, the indices had an immediate negative follow-through, taking out Friday's lows early in the morning, and then cascaded lower for most of the session until the last hour, when they managed to snapback off the rising trendline on the Nasdaq 100, although the S&P 500 is now below that. We'll be watching key support just beneath in the 858-60 zone tomorrow for further clues.
Good trading!
Harry
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