The markets got off to a very ugly start for 2008, as the day started out with just a slight bump to the upside in the first 15 minuites, but immediately they rolled over and sold off hard all morning. By late morning they stabilized & then bounced around, but then just after lunch hour they started a sharp, what looked like short-covering rally. The indices snapped back and did about a 0.382 Fibonacci retracement of the morning’s losses, and then rolled over just as sharply, with the S&P 500 and Dow taking out the earlier lows, making nominal new session lows. When the Nasdaq 100 did not confirm that they snapped back off the lows in a late bounce.

But still the indices closed extremely weak, with the Dow down 221, the S&P 500 21, and the Nasdaq 100 more than 35. The Philadelphia Semiconductor Index (SOXX) was down 11.3, or 2 1/2 percent, closing under 400 for the first time since August, 2006!

The technicals surprisingly weren't that bad today on advance-declines for such a big loss, but the up/down volume was worse. Advance-declines were negative by just 3 to 2 on New York and by 2 to 1 on Nasdaq. But up/down volume was 3 1/2 to 1 negative on both exchanges, with a little more than 1.4 billion traded on New York and just over 2 billion Nasdaq.

TheTechTrader.com board was very mixed, with just a slight edge to the losing side today. On the upside, Akeena Solar (AKNS) on a contract announcement gapped up big, and ran up $3.50 today on 15 1/2 million shares. Solarfun (SOLF), also in the very strong solar sector, gained 3.34 on 3 1/2 million shares. Hoku Scientific (HOKU) jumped 1.08 on nearly 4 million. China Sunergy (CSUN) gained 1.19 on nearly 5 million, and Ascent Solar (ASTI) jumped 1.06.

Other point-plus gainers included Blue Phoenix (BPHX), Israeli software developer, up 1.07. Portfolio position Nextwave Wireless (WAVE) popped 53 cents on 450,000, and was the #7 leading percent gainer on Nasdaq today.

On the downside, point-plus losses included Aluminum Corp. of China (ACH) down 2.04, Energy Conversion Devices (ENER) 1.27, Emcore (EMKR) 1.08, Global Solutions (GSOL) 1, China Finance Online (JRJC) 1.25, Sigma Designs (SIGM) 1.22 and TBS International (TBSI) 1.46.

Stepping back and reviewing the hourly chart patterns, the indices sold off sharply in the morning, taking out a couple layers of support, but the retest of the 2040 area on the Nasdaq 100 held, creating some late buying pressure. But still the indices closed negatively and with very bearish-looking patterns.

We'll have to see if there's any downside extension, but the areas we'll be keeping close tabs on over the next few days are support at the 2020 & 2000 levels on the Nasdaq 100, and the 1430 & 1410 levels on the S&P 500, with initial minor support at the 1435 area, yet to be violated.

Harry Boxer is a technical consultant to many Wall Street hedge funds and large institutional traders, and author of TheTechTrader.com, a real-time diary of his day, swing and intermediate-term trades. For more of Harry Boxer, sign up for a free 15-day trial to his Real-Time Technical Trading Diary, or sign up for a free 30-day trial to his Top Charts of the Week service.