The market experienced a profit-taking pullback session. Although the morning started out with a gap-down, they quickly rallied from support and sharply so, with the NDX reaching a new rally high.  But at that point the S&P and Dow did not, and that signaled a negative divergence which caused a rollover after lunch. The afternoon saw a steady downward progression and only a last half-hour snapback caused the indices to come back off the lows for the session.

The indices closed down today by 37 1/2 on the Dow and 4.70 on the S&P.  The NDX was off a little over 2, and the SOX was up 5.41 today, led by some of the large-cap semiconductors such as Intel (INTC) and National Semiconductor (NSM)).  As a result the SMH was up 60 cents today.

The Advance/Decline readings were negative by 5 to 3 on New York and about 3 to 2 on Nasdaq.  Up/down volume was a little less than 2 to 1 negative on New York on total volume of about 1.4 billion.  Nasdaq traded about 1.6 billion, with up/down volume just about dead-even flat.

TheTechTrader.com board was very mixed.  There were some outstanding gainers. Forward Industries (FORD) snapped back by nearly 2 1/2 points on over 2 million shares, and nearly reached its all-time highs set over the last couple weeks.  So a retest is underway.

Energy Conversion Devices (ENER) advanced 1.53 and continues to act great.  Also in the alternative energy section, Distributed Energy Systems (DESC) was up 97 cents on 2 3/4 million shares.  Dynamic Materials (BOOM) had a strong session today, up 1.40.  Neoware (NWRE) one of our recent Charts of the Week, was up 55 cents.

On the downside today, there were fractional losses by Rediff.com India (REDF) down 59 cents, ViroPharma (VPHM) 43 cents, Industrial Services of America (IDSA) 45 cents,  DayStar Technologies (DSTI) down 47 cents, and Cavalier Homes (CAV) down 41 cents.

Stepping back and reviewing the overall patterns, we did some testing in the afternoon and did have a late snapback, so it's going to be important to see which way they follow through. 

Overhead resistance is currently at 1600 and then at 1605 on the NDX, and at 1234 and 1237 on the S&P.  On the support side, we'll be watching 1591 NDX and the 1228-29 zone on the S&P.

Good trading!

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.