A monster session today! The market was very volatile in the morning, gapping down at the open, and falling back to a near double-bottom off last week's lows on the S&P. But when the NDX was more than 10 points off retesting the same low, a positive divergence resulted, and markets then moved back up and retested key intraday resistance, popped through them after the lunch hour and headed north with a vengeance that was unabated until the close.
The indices closed at the highs for the day going away, up a whopping 128.80 on the Dow, 182 points off the session lows. The S&P 500 was up 17.61 today but more than 25 points off the earlier lows. The Nasdaq 100 also exploded 43 points off the low, up 31.18 on the day. The SOX Index, which was down as much as 14 early in the session on the Intel (INTC) earning's news, ended up a dime on the day, a huge reversal, taking back all the steep early losses.
If this isn't a short-term bottom, I don't know what is! It certainly smacks of another important October low.
The technicals were positive by about 2 to 1 on New York and a like amount on Nasdaq. The story was in the up/down volume, however. NYSE volume topped 2.1 billion shares, with a 3 to 1 positive ratio. Nasdaq was nearly the same, a little less than 3 to 1 on strong total volume of nearly 1.9 billion.
Many stocks came back way off their lows, but weren't able to get back into positive territory. However, TheTechTrader.com board was generally positive. Forward Industries (FORD) snapped back 1.63 and Rediff.com India (REDF) 1.24. Cavalier Homes (CAV) was up 64 cents. Energy Conversion Devices (ENER), after reaching a new three-week pullback low around 30 1/2, exploded and closed over 33, up 50 cents on the day.
Global Industries (GLBL) was up 47 cents, Kendle International (KNDL) 48 cents, and Momenta Pharmaceuticals (MNTA) 91 cents.
On the losing side, BioCryst Pharmaceuticals (BCRX) gave back 1.10 from recent big gains. Neoware (NWRE) was down 61 cents and Evergreen Solar (ESLR) down 35 cents and Daystar (DSTI)off 42 cents in the alternative energy group.
Stepping back and reviewing the hourly chart patterns, after pulling back sharply from the get-go, the indices stabilized for much of the morning, then exploded in the afternoon and powered ahead all afternoon, taking out key levels of overhead resistance at 1550 NDX, then taking out 1560 as well, closing at 1568.
The S&P, after double-bottoming near 1170, then exploded back up through key resistance at 1190, closing at 1195.
Key overhead resistance at around the 1201-03 zone on the SPX is key resistance and our next objective.
On the NDX our next target is the 1580-85, but it certainly looks like they made an important low today, particularly on heavy volume, and I was, to say the least, impressed technically today and look forward to an extension of the gains.
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.