The markets had an extremely negative session. The day started out with a big gap to the downside. They bounced early in the morning, but then went sharply lower. They had another bounce late in the morning, but as soon as the lunch hour was over they headed south quickly, and in the late afternoon they tried a bounce that went right up to resistance but failed to punch through. They rolled over into the close and hard, closing at the lows for the day going away.
Net on the day the Dow was down nearly 345, the S&P 500 down more than 38, and the Nasdaq 100 more than 58. The Philadelphia Semiconductor Index (SOXX) was down 11.46, or 3 1/2 percent.
The technicals reflected the very negative day on the Street. Advance-declines were more than 5 to 1 negative on New York and about 4 1/2 to 1 negative on Nasdaq. Up/down volume was about 13 to 1 negative on New York on total volume of a little over 1 1/4 billion. Nasdaq traded 2 1/3 billion and also had a ratio of about 13 to 1 negative on declining over advancing volume.
TheTechTrader.com board was extremely negative. The only point-plus gainers were the inverse ETFs, with the SDS up 3.93, the QID up 2.71, and the DUG, which is the ultrashort oil & gas, up 1.72, the first time over $40 in nearly 6 months.
On the plus side, Clean Energy (CLNE) at 18.77 was up 89 cents, although that traded nearly a point higher earlier in the day. It traded 3 1/3 million. Other than that, Solarfun (SOLF) jumped late in the session and closed up 70 cents on 4.4 million.
Most of the action today was on the downside. Leading the way was Energy Conversion Devices (ENER) down 3.99, DryShips (DRYS) down 3.51, and Almost Family (AFAM) 2.17.
Other point-plus losers included LEH down 1.77, JA Solar (JASO) down 1.03, Canadian Solar (CSIQ) down 1.10, Excel Maritime (EXM) 1.28, Focus Media (FMCN) 1.14, and Blue Coat Systems (BCSI) 1.03.
The USO gave back 1.45 and the QQQQ 1.46.
Stepping back and reviewing the hourly chart patterns, multiple layers of support were taken out today, but the most important one was early in the session when the indices broke though the SPX 1260-64 support zone, closing at 1236.55. It was a very negative day for the indices, and more may be coming, although the Nasdaq 100 right now is just above the July lows and S&P 500 now at secondary support near the 1834-35 zone. They may find some support here. We're a little short-term oversold and looking for a bounce-back over the next day or two, but the trend is now firmly entrenched to the downside.
Good trading!
Harry
