By Harry Boxer, The Technical Trader
The stock market indices opened with a gap today, strongly to the upside, took out resistance on the Nasdaq 100 at 1840 and filled the gap up to 1850 on the S&P 500. Resistance at 1890 thwarted the advance and couldn’t make any further progress. At that point, without the confirmation from the S&P 500, the indices backed off, bounced and formed what looked like bear flags, then rolled over hard in the afternoon, closing not far off the session lows, a reversal of yesterday’s rally.
Net on the day, the Dow down closed under 10,000 at 9974.45, down 69.30, about 200 points off its high. The S&P 500 was down 6.08 at 1067.95, closing 23 points off its high, and Nasdaq 100 closed 54 points off its high at 1796.47, down 19.21.
Advance-declines were about 3 to 2 positive on the New York Stock Exchange and 15 to 12 negative on Nasdaq. Up/down volume was only 10 to 9 positive on New York with total volume of 1.9 billion. Nasdaq traded about 3 billion shares today and had about a 3 to 2 negative plurality.
TheTechTrader.com board, as a result, was fairly mixed with very few point-plus gainers and losers. On the plus side, in a fairly firm Chinese sector today, China Automotive Systems, Inc. (CAAS) managed to gain 1.16 at 18.40. Rino International (RINO) jumped 84 cents to 12.38, and Solarfun Power (SOLF) was up 83 cents at 7.10.
Among other stocks of note, Vertex Pharmaceuticals (VRTX) was up 79 cents at 34.74, although it traded as high as 38 in the pre-market after some very positive Phase II results from one of their drugs. Cree, Inc. (CREE) managed to gain 53 cents at 65.04.
In addition, Brigham Exploration (BEXP) was up 64 cents to 16.08, and Northern Oil and Gas, Inc. (NOG) jumped 56 cents to 13.33, in a firm oil group, as oil was higher today.
The ETF sector was mixed, but several of the ETFs were up small fractions. The Direxion Daily Financial Bear 3X Shares (FAZ) was up 27 cents at 16.27, about 1.25 off its low. The iPath S&P 500 VIX Short-Term Futures ETN (VXX) lost 63 cents at 31.03, but was 2 points off its low on a strong afternoon late rally.
Among the leaders on the downside, Goldman Sachs (GS) lost 2.26 at 140.30, Google Inc. (GOOG) lost 1.60 to 475.47, Baidu, Inc. (BIDU) 1.49 at 67.59, Amazon.com 1.65 at 123.21, and Apple Inc. (AAPL) 1.11 at 244.11.
Stepping back and reviewing the hourly chart patterns, the indices gapped up and ran steadily higher in the morning, reached their peaks within an hour and rolled over, bounced mid-day, and then rolled over even harder in the afternoon to close not far off the session lows in a give-back session today.
The overall patterns appear to be potential head-and-shoulder bottoms with right shoulders forming in this area. However, a breakdown from these zones could signal a retest of the lows or worse. So the indices have an important session tomorrow to see whether they can extend the tide here and rally back, take out resistance and snapback higher or break down in this zone and resume the slide. We’ll see how it goes.
Good Trading!
Harry
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