The indices put on a steady rally all session after early morning sharp weakness, and ended in the positive column, other than the Nasdaq 100 (NDX) and Philadelphia Semiconductor Index (SOXX). The blue chip indices, in particular, rallied back steadily to end near the highs of the intraday 5-wave rally.

The day started out with a gap down and a sharp move lower. A snapback to resistance failed, and they rolled over sharply, reaching 1425 NDX and 886 S&P 500 (SPX), slightly below support. They came back, tested resistance for much of the afternoon and couldn’t get through, but late in the session managed to punch out on some late short covering.

Net on the day the Dow was up 44.13 to 8324.87, and the S&P 500 up just 2.30 at 898.72, but that was 12 points off its low. The Nasdaq 100 was down 5.27, still about 17 points off its low as well.

The technicals ended negatively, however, by 3 to 2 on advance-declines on New York and by nearly 2 to 1 on Nasdaq. Up/down volume was a little better than 3 to 2 negative on New York and 2 Ã,½ to 1 negative on Nasdaq. So technicals were still quite negative despite the snapback rally.

TheTechTrader.com board was mostly lower. There were some outstanding issues. Goldman Sachs (GS) gained 2.97 to 146.46, leading the financial sector. Dendreon (DNDN) was up 1 to 24.48 on an upgrade.

The iShares FTSE/Xinhua China 25 Index (FXI) was up 73 cents today at 38.17, and the Direxion Small Cap 3x Bear (TZA) gained 71 cents to 24.34, although that closed about 1.10 off its high.

Point-plus losers included Mosaic (MOS), down 1.47 to 43.64, and Apple (AAPL) down 1.41 to 138.61. The U.S. Oil Fund ETF (USO) dropped 1.34 to 34.71 on the sharp drop in crude oil. The UltraShort Real Estate ProShares (SRS) gave back 1.09 on a late plunge, closing at 19.96, after trading as high as 21.78 earlier in the day.

Portfolio position 3Par (PAR) was up 16 cents to 12.52, Oculus Innovative Sciences (OCLS) up 18 cents to 3.45, and Geron (GERN) up 26 cents to 7.91.

Stepping back and reviewing the hourly chart patterns, as indicated earlier a gap down, a snapback and then a sharp drop in the morning got the indices oversold intraday. A 5-wave rally brought them back and accelerated into the close at the end of the day in what looked like short-covering.

We’ll see if that’s meaningful or not, as the day’s SPX lows were just a tad below the low of two weeks ago. So we’ll soon see if that’s an important hold in this area or if they end up rolling over.

Harry Boxer is a technical consultant to many Wall Street hedge funds and large institutional traders, and author of TheTechTrader.com.