By Harry Boxer, The Technical Trader
The markets actually had a positive up-day, although they started off very negatively.
The day started out with pre-market futures sharply lower. They gapped down and went sharply lower in the first 20-30 minutes and ended the decline at what turned out to be their session lows, holding 1200 support on the Nasdaq 100 and 820 on the S&P 500. A quick retest was successful, and then they took off, with the NDX running from 1201 to 1235 in the next hour, and the S&P jumping from 820 to 840. They backed and filled for a bit in what looked like a rising flags, and sure enough exploded out of those flags to reach 1250 NDX and 850 S&P by just before noon. During the lunch hour they backed and filled and consolidated, and after lunch tried to rally, retested the highs, but couldn't punch through, and then backed off sharply. Support held, and they bounced again in the last hour to close positively on the session.
Net on the day the Dow was up 106.41, to close back over 8000 at 8063. The S&P 500 was up 13.62 at 845.85, and the Nasdaq 100 was up nearly 30 at 1245.11. The Philadelphia Semiconductor Index (SOXX) advanced 8.56, a gain nearly 4 percent.
The technicals were very positive by nearly 2 to 1 on advance-declines on both New York and Nasdaq. Up/down volume, however, was almost 3 to 1 positive on New York on total volume of 1.6 billion. So volume increased today. Nasdaq traded almost 2 1/2 billion and had more than 5 to 1 positive volume ratio.
So, a very upbeat day on the Street, and the afternoon consolidation did well to fortify the pattern for tomorrow.
TheTechTrader.com board was generally positive, with many point-plus gainers. The agriculture stocks led the way with Potash (POT) up 6.48 to 85.92. CF Holdings (CF) was up 1.55 to 52.44, Agrium (AGU) up 1.73 to 36.12, and Mosaic (MOS) up 2.35 to 41.35.
Shippers had a mixed session, rallying early, only to give a lot of it back. DryShips (DRYS) closed down 73 cents at 6.43, after reaching 7.38 on 7.6 million. Excel Maritime (EXM) dropped 38 cents 7.60, after reaching as high as 8.25. Genco Shipping (GNK), a new one we're following which we added to our portfolio today, closed near unchanged at 18.71, after being as low as 17.55 earlier in the session.
Other stocks of note, Apple (AAPL) was up 2.91 to 93.46, and Research in Motion (RIMM) advanced 84 cents to 56.80.
Financials were positive after a very weak start. They reversed sharply, which helped the market rally today. JP Morgan (JPM) was up 50 cents to 24.54, Morgan Stanley (MS) up 1.18 to 23.19. Wells Fargo (WFC), despite ending down 1.18, was more than 1.50 off its low. Similarly, Bank of America (BAC) got down to 3.77 but closed at 4.84, more than a $1 reversal, up 14 cents on the day, on 3/4 billion shares traded today.
Cree Inc. (CREE) advanced 75 cents to 21.26, and portfolio position DGIT at 14.57 was up 65 cents. Sequenom (SQNM) reversed sharply from a low of under 16 this morning to close at 17.11, up 18 cents on the day, and Aerovironment (AVAV) was up 2.59 at 38.84.
The other point-plus gainers were among the ETFs, with the iShares MSCI Brazil Index ETF (EWZ) up 1.42 to 38.04, the Ultra Oil & Gas ProShares (DIG) up 1.33 to 29.02, and the Direxion Large Cap Bull 3X Shares (BGU), a portfolio position, was up 1.49 to 29.42.
On the downside, the ultrashort instruments got hammered, with the Direxion Financial Bear 3x Shares (FAZ) dropping from an early high of nearly 60 to under 48, and closed at 50.85, down 3.43, a big negative reversal there. Likewise, the Direxion Large Cap Bear 3X Shares (BGZ) dropped from 71 to 63.45, closing just under 65, down 3.06.
Stepping back and reviewing the hourly chart patterns, after an early drop the indices exploded, and then backed and filled in the afternoon to consolidate, but ended with a nicely positive session, which augurs well for the bulls. However, despite the fact the Nasdaq 100 made nominal new 4-week highs, the S&P 500 is far from it and in danger of setting up a negative divergence, which could thwart progress in the indices. We'll see what tomorrow brings, as some key economic reports may affect trading.
Good trading!
Harry
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