The market went abruptly lower early in the morning after a rally from the get-go failed to take out key resistance. The Nasdaq 100 reached as high as 1648 and the S&P 500 as high as 1028, both right near key resistance levels, and then did an about-face, despite the positive economic news that came out earlier. The selloff was sharp and deep and lasted till mid-day when they tried to bounce, but looked more like a countertrend corrective move.

They rolled over in the last hour, with the SPX making new session lows near 996, closing at 998.04, down 22.58. The Dow was down 185.68 at 9310.60, and the NDX down 29.35 at 1595.84. So key levels at SPX 1000 and NDX 1600 were broken, and they closed below them.

Advance-declines were decisively negative by 5 to 1 on New York and by about 4 to 1 on Nasdaq. Up/down volume was nearly 20 to 1 negative on New York on total volume of a little over 1.6 billion. Nasdaq traded more than 2.6 billion and had about a 7 to 1 negative volume ratio.

TheTechTrader.com board was sharply lower as a result. The biggest culprit today were the financials. American International Group (AIG) led the way down 9.33 to 36.00, on 86.6 million shares. The Direxion Financial Bull 3x Shares (FAS) got hammered for 11.05 to 68.10, partially attributed to a drop of 5.29 in Goldman Sachs (GS) at 160.17. Wells Fargo (WFC) dropped 1.31 to 26.21. Morgan Stanley (MS) 1.51 to 27.45, JP Morgan (JPM) 1.79 to 41.67, and Citigroup (C) 46 cents to 4.54.

Junior biotechs had a very strong opening, but reversed sharply and had very negative reversals, closing near the session lows. BioCryst Pharmaceuticals (BCRX) ran up to 13.47 early in the day, closed at 11.54, down 96 cents on 6 Ã,¼ million. Human Genome Sciences (HGSI) touched as high as 19.75, but closed at 18.55, down 1.21 on 8.5 million. OncoGenex Pharmaceuticals (OGXI) got hammered for 3.51 after reaching near 40 in the morning, closing at 36.65. Sinovac (SVA), which soared in the morning to 12 1/2, closed at 10.46, up 75 cents, but gave back more than 2 points of its gain on near record volume of 42 million.

On the plus side, the ultrashorts were very strong, with Direxion Financial Bear 3x Shares (FAZ) up 3.22 to 26.39, the UltraShort Real Estate ProShares (SRS) 1.18 to 12.64, the Direxion Small Cap 3x Bear (TZA) 1.02 to 15.76, and the Direxion Large Cap Bear 3X Shares (BGZ) up 1.65 to 25.99.

Stepping back and reviewing the hourly chart patterns, an early quick rally failed at resistance, rolled over very sharply, took out support, and they closed very negative on the session, down more than 2 percent on the Dow and SPX and nearly that much on the NDX. We’ll soon see what kind of damage today did to the overall trend and what kind of continued downside we may get tomorrow.

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