Today was another nasty follow-up to yesterday's nasty session.  That makes two in a row, and they both came on fairly heavy volume, indicating a thrust to the downside and a change of direction.  How far this goes remains to be seen, but additional technical damage was done today, as the indices closed at the lows for the day going away.

The day started out with a hesitation move that went no where, and then it dropped sharply.  A bounce to resistance on three different occasions for the rest of the session failed.  With a couple hours to go in the session a third and final rally attempt failed to break through intraday resistance and the indices rolled over and got hit hard and steadily, closing at the lows for the day going away.

The Dow was down 123 3/4, the S&P 500 more than 18, and the Nasdaq 100 more than 24.  The SOX Index was down 6 1/2.

The technicals were extremely negative, with 2455 down and 533 up on New York, nearly a 5 to 1 ratio, very negative.  It was nearly as bad on Nasdaq, with 2231 down and 539 up.  Up/down volume was equally as bad, more than 10 to 1 negative on New York, with up-volume 150 million and down-volume 1.6 billion.  Total volume was about 1 3/4 billion.

Nasdaq volume was a little less than that but close, more than 1.7 billion.  The ratio was about 5 to 1 negative, with up-volume 283 million and down-volume 1.44 billion.  So, as negative a day as we've seen in quite a while, and it does not augur well for near-term price direction.

TheTechTrader.com board was mostly negative with some extremely negative individual stocks today that broke down.  Energy Conversion Devices (ENER) got hammered for another 3 points, and has pulled back about 6 points just in the last two sessions.  Other losses of note, Cutera (CUTR) was down 2.01, Convera (CNVR) 2.07, Dynamic Materials (BOOM) down another 1.92, Forward Industries (FORD) 1.82, Kendle International (KNDL) 1.24, and Vertex Pharmaceuticals (VRTX) 2.03.  Tech and biotech got hit hard.

On the upside, only fractional gains here and there, with Neoware (NWRE) and Panacos Pharmaceuticals (PANC) both up 26 cents today.

Reviewing the hourly chart patterns, the indices broke and broke hard in the last two days, taking out several layers of support.  In the case of the S&P, they took out the August and September lows, and closed at the lowest point since early July, nearly three months. 

More of a concern is that the major trendline going back to the April lows has been severed, and it appears that a top is in . . . although the short-term indices are oversold, and I do expect a snapback.  I'll be watching a snapback carefully for signs of a low-volume move that appears bearish, or whether we get a thrust to the upside that can reverse this, but right now we're looking lower.

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.