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Thursday, January 8, 2009

Indices Snap Back Off Bottom of 3-Day Down-Channels


By Harry Boxer, The Technical Trader

The markets got a solid afternoon rally that brought it back from new several day pullback lows, and put the S&P 500 and Nasdaq 100 back in the plus column at the end of the day, although the Dow wasn't quite able to make it back & ended in the loss column.

The day started out with a move down that hit the session and pullback lows in the first hour or so. Then the indices staged a sharp snapback move that took them right back up to overhead resistance at NDX 1240 and S&P 908, but couldn't get through, and they backed off again in a 3 wave decline and retested the session lows. When they were successful in doing that, they staged an afternoon move that took them from 1227 to 1252 on the Nasdaq 100, and 897 to 910 on the SPX and closed near the highs for the day going away.

Net on the day the Dow was down 27 1/4, but closed about 100 points off low. The S&P 500 up 3.08 and 13 points off its low, and the Nasdaq 100 was up nearly 14, about 30 points off its low. The Philadelphia Semiconductor Index (SOXX) was down just 0.58

The technicals managed to close solidly on the positive side today. Advance-declines were better than 3 to 2 positive on both New York and on Nasdaq. Up/down volume was also better than 3 to 2 positive on New York on light total volume of 1.17 billion. Nasdaq traded nearly 2 billion and had nearly a 3 to 1 positive volume ratio.

TheTechTrader.com board was mostly higher, with many multiple point-plus gainers. Energy Conversion Devices (ENER) was up 2.23 to 28.97.

Anadys Pharmaceuticals (ANDS) jumped to 4.10, up 2.19, on very positive drug news, a gain of 117% on 6 million shares. Apple (AAPL) gained 1.69.

The agriculture stocks were generally firm today. Potash (POT) closed $5 off its low, up 91 cents on the day. Mosaic (MOS) also jumped 3 1/2 points off its low, and closed up 1.33. CF Holdings (CF) at 54.67 was 1.39, $3 off its low.

DryShips (DRYS) had another exceptional session today on 31.5 million, closing at 15.13, up 2.17 and $3 off its low. Excel Maritime (EXM) also gained 89 cents on 4 million shares. Rambus (RMBS) gained 73 cents at 18.50.

Solar stocks were generally strong, with SunPower (SPWR) up 1.58 to 39.65 ,Solarfun (SOLF) up 45 cents to 5.77 and Canadian Solar (CSIQ) up 61 cents to 6.91.

On the downside, Agrium (AGU) dropped 1.28 and the Ultrashort QQQQ ProShares (QID) down 1.07. Those were the only point-plus losers on our board today.

TeleCommunication Systems (TSYS) lost 40 cents, ProLogis (PLD) 41 cents, Aluminum Corp. of China (ACH) 27 cents, and iShares FTSE/Xinhua China 25 Index (FXI) 52 cents today.

Stepping back and reviewing the hourly chart patterns, the indices hit the bottom of their 3-day down-channels early in the morning and reversed, consolidated, and then rallied strongly into the close, but still are below the 3 day declining tops lines and lateral price resistance. 1255 , then 12675-70 zone are the levels we'll be watching closely tomorrow on the NDX, and the 912-13 area and then 920-22 zone on the S&P 500.

Good trading!

Harry

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