The indices had an up-day on Tuesday, but the edge was taken off the positive gains with a very sharp setback in the last hour that took the indices way off their rally highs.

The day started out with a very strong gap-up on positive futures. They then backed and filled in the morning, and by mid-morning started to work their way higher. When support held all morning they broke out to the upside, rallied sharply, took the NDX above 1255, reaching as high as 1258 before pulling back very sharply in the last hour, about a 24-point drop, back down to 1234, closing at 1237. The SPX at the same time gapped up at around 790, ran up to 890, but slipped back to 797 by the close.

Net on the day the Dow was up 87 at 7608, the S&P 500 up 10.34 to 797.87, and the Nasdaq 100 up 16.20 to 1237. The Philadelphia Semiconductor Index (SOXX) advanced 1.46 to 230.91.

The technicals were positive on advance-declines by more than 3 to 1 on New York and better than 2 to 1 on Nasdaq. Up/down volume was almost 4 to 1 positive on New York on total volume of just under 1 2/3 billion. Nasdaq traded just under 2 billion and had about a 3 to 1 positive volume ratio.

TheTechTrader.com board was mostly higher. Leading the way were Amazon (AMZN) was up 2 to 73.44, JP Morgan (JPM) up 1.73 to 26.58 and American Italian Pasta (AIPC) at 34.81 up 1.39. Those were the only point-plus gainers on our board.

Other gainers, Best Buy (BBY) was up 99 cents to 37.96, Bank of America (BAC) in a firm financial sector up 79 cents to 6.82, Wells Fargo (WFC) at 14.24 up 87 cents and Morgan Stanley (MS) at 22.77 was up 64 cents.

On the downside, the UltraShort Financial ETF (SKF) at 98.16 was down 11.87, the UltraShort Real Estate ProShares (SRS) at 52.85 was down 8.16, and the Direxion Financial Bear 3x Shares (FAZ) at 20.69 fell 3.95.

Stepping back and reviewing the hourly chart patterns, they gapped up, consolidated in the morning, and then ran hard by mid-morning to reach the session highs with an hour to go. But, they rolled over hard at the end of the day, and severely tested support. The overall pattern now appear to be developing head & shoulders topping type patterns, but we'll soon see if today's lows near NDX 1231.5 & SPX 791 can hold any further retracement.

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.