The indices suffered a down day to start the week. Most of the losses occurred in the first half hour.
The indices suffered a down day to start the week. Most of the losses occurred in the first half hour. The indices gapped down big, then went sharply lower from there, held last Thursday’s lows on the Nasdaq 100, and slightly took them out on the S&P 500. That’s about where they began to stabilize and rally back.
They took back a portion of their losses, retested, and from there they bounced and went narrowly sideways for a few hours. They lifted in early afternoon, but failed to take back the morning highs, came back sharply lower to retest the lows, but once again for held those lows. Then in the last half hour they snapped back rather sharply, taking back a big chunk of the losses.
Still, net on the day the Dow was down 47.92 at 9496.28, which was about 60 points off its low. The S&P 500 was down 8.31 at 1028.62, about 6 points off its low, and the Nasdaq 100 down 18.05 at 1625.19, 9 points off its low. The Philadelphia Semiconductor Index (SOXX) lost exactly 5 at 306.18.
The technicals were negative by about 3 to 1 on advance-declines on New York and 2 1/2 to 1 on Nasdaq. Up/down volume was nearly 4 to 1 negative on New York on total volume of a little more than 1 1/3 billion. Nasdaq traded just over 2.2 billion and had about a 13 to 8 negative volume ratio.
TheTechTrader.com board was largely narrowly changed, but there were several point-plus gainers and losers. On the plus side, junior biotech SinoVac (SVA) jumped 3.39 on positive drug news to close at 9.71 on 45.8 million, a gain of 54% today.
Other junior biotechs were firm. Jazz Pharmaceuticals (JAZZ) jumped 22 cents to 7.29, and Helicos Biosciences (HLCS) surged 1.05 to 2.80, a major percentage gain. Spectrum Pharma (SPPI) gained 79 cents to 8.50, SciClone Pharmaceuticals (SCLN) 28 cents to 4.86, and Oculus Innovative Sciences (OCLS) 24 cents to 2.46.
The ultrashort ETFs were firm, but just fractionally, with the UltraShort Real Estate ProShares (SRS) up 28 cents, Direxion Small Cap 3x Bear (TZA) up 62 cents, and the Direxion Large Cap Bear 3X Shares (BGZ) up 58 cents.
On the downside, the U.S. Oil Fund ETF (USO) lost 1.61 to 36.05 on lower crude, and Direxion Financial Bull 3x Shares (FAS) lost 1.05 to 79.15. American International Group (AIG) got hammered back 4.90 to 45.33 on profit-taking.
Stepping back and reviewing the hourly chart patterns, the indices were down sharply in the morning, stabilized most of the session, and came back late to pare back the losses, but still had a negative session to start the week. We’ll see if Friday morning’s top, which is now about 35 points away on the NDX and 18 points away on the SPX, can be retested and overtaken, or whether they’ll roll over and take out today’s lows. Current support from this morning and Thursday’s lows is between 1612 and 1616 NDX and the 1015-16 area SPX.
Harry Boxer is a technical consultant to many Wall Street hedge funds and large institutional traders, and author of TheTechTrader.com.