The markets had a very definitive down-day highlighted by the Fed announcement of a quarter-point rate hike, but more importantly the wording and the dissention by one of the Fed board members is what I believe caused the market to really react negatively. 

After a strong morning, starting with a gap-up, and a very strong follow up rally, the indices went into a late morning and early afternoon funk before the Fed announcement.  They gyrated for a few minutes after the announcement, but then plunged sharply, taking out some layers of support.  They then did manage to snap back slightly, but then pulled back in the last five minutes.

Net on the day the Dow was down 76, about 120 points off the high.  The S&P 500 was down 9.60, about 15 points off the earlier high.  The Nasdaq 100 was down nearly 8 points, 28 points off the high.  The SOX index was down 1.86, and that was some 8 points off the earlier high.

So, there were sharp negative reversals on all exchanges after the Fed announcement.

The technicals were decidedly negative by 22 to 10 on advance-declines on New York and by 3 to 2 on Nasdaq.  Up/down volume was a little less than 4 to 1 negative on New York on volume of 1.7 billion.  More than 1.80 billion was traded on Nasdaq, with an 11 to 7 negative plurality on up/down volume.

TheTechTrader.com board was active, but most stocks were fractionally mixed.  Energy Conversion Devices (ENER) soared to over 42, my intermediate trading target, before backing off and closing up 1.33 at 40.59 on more than 3 million shares.

Kendle International (KNDL), after yesterday's hit, came back 1.15.  Low-priced SYNERGX Systems (SYNX) was up 57 cents on 3.3 million, and Intellisync Corp. (SYNC) was up 26 cents on 2.4 million.

Rediff.com India (REDF) advanced 35 cents, but most other stocks were just fractionally mixed.

On the downside, Cavalier Homes (CAV) gave back 78 cents, Convera (CNVR) 66 cents, Dynamic Materials (BOOM) another 53 cents, Forward Industries (FORD) 84 cents, and Spire Corp (SPIR) 62 cents.

So, other than ENER, there was some softness in the alternative energy sector with the drop in oil today.

Stepping back and reviewing the hourly chart patterns, the significance of today's action was that short-term support was taken out below the 1580 level, closing just beneath it on the NDX at 1579.23.  The S&P took out support at the 1225 and then tested the 1220 area near the close.

Beneath that is 1215.  Support beneath here on the NDX is around the 1570-72.   We'll be watching those levels tomorrow to see if we can stem the tide.

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.