The indices opened strong this morning in a follow-through to yesterday's strong rally, but that didn't last long.  The indices then backed and filled for most of the morning and into the lunch hour in what looked like a bullish consolidation before another leg-up attempt.  

But when that attempt was weak right at the lunch hour and failed, the indices then rolled over, took out the lows, and then plunged in the afternoon session, particularly late in the day.  A very sharp snapback rally brought them back just before the close only to back off again into the close.

The Dow and S&P 500 gave back all of yesterday's gains and then some.  The Dow was down 133, the S&P 18, and the NDX 14.  Even though the SOX was up as much as 5 points earlier, it still managed to close up 0.41 on the day and prevented a much steeper loss on the Nasdaq.

However, the reversal was an ugly one.

The technicals were solidly negative as well by 3 to 1 on New York and by a little bit more than 2 to 1 on Nasdaq.  U/down volume was the culprit, though, more than 5 to 1 negative on New York on just under 2 billion traded.  Nasdaq was about 2 1/2 to 1 negative on a total of about 1.84 billion.

TheTechTrader.com board was mixed to mostly lower. It was led on the downside by BioCryst Pharmaceuticals (BCRX), which continued its sell-off of the last few days after its strong run earlier in the week and last week.  It was down 1.34 on more than 9 million shares.  

Energy Conversion Devices (ENER) gave back 1.28, Dynamic Materials (BOOM) 81 cents, Vertex Pharmaceuticals (VRTX) 46 cents, Sierra Wireless (SWIR) 42 cents, Rediff.com India (REDF) 63 cents, Kendle International (KNDL) 41 cents, and Global Industries (GLBL) down 64 cents on the day.

Losses continued in the alternative energy sector as well, as oil dropped sharply.  DayStar Technologies (DSTI) was down 62 cents and Evergreen Solar (ESLR) 22 cents.

On the plus side, there were a couple gainers today on excellent earnings.  Juniper Networks (JNPR) advanced 80 cents and Forward Industries (FORD) was up 97 cents.

Stepping back and reviewing the hourly chart patterns, the very clean high-volume breakout yesterday dissipated quickly, and important support was tested successfully at the end of the day on the Nasdaq 100, but broken on the S&P 500.

Beneath here the 1169-70 range must hold on the S&P or we are in jeopardy of going lower.  But the Nasdaq 100 is far and away above the lows set a few days ago, and I expect a positive divergence to occur even if the S&P does make new lows, which perhaps could help the market turn higher.

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.