The indices ended mixed, but they were volatile in a narrow range today.  The NDX acted better than the blue chips.

The day started out with a gap up.  They immediately sold off to their morning lows, which turned out to be the lows for the day.  A sharp rally on the NDX took it to slightly new highs, but when the S&P 500 did not confirm, they backed off and meandered sideways in a narrow range in mid-afternoon before surging back again in the last hour or so.  The NDX and SPX closed near the highs for the session.

Net on the day, the Dow was down 11.7, the S&P 500 up 2.20, the NDX up a little more than 7, and the SOX Index down a small fraction.

The technicals were mixed, negative by 150 issues on New York but by 3 to 2 on Nasdaq.   Up/down volume was 8 to 7 positive on New York, with more than 1.5 billion.  Nasdaq traded nearly 1 2/3 billion, but just a slight positive plurality on up-volume over down-volume.

TheTechTrader.com board was mostly higher, led by China Techfaith (CNTF), up 3.12 on 5 1/4 million.  Rediff.com India (REDF) advanced 1.34.  Dynamic Materials (BOOM) snapped back 72 cents, Dialysis Corp. of America (DCAI) 69 cents, Evergreen Solar (ESLR) 46 cents and reached a new four-year high.  ScanSoft (SSFT), one of our Charts of the Week Model Portfolio positions, was up 55 cents on nearly 2 million shares.

On the downside, Biovail (BVF) lost 1.60, Cutera (CUTR) 1.05 and Neoware (NWRE) 1.07, with Energy Conversion Devices (ENER) losing 93 cents.

Stepping back and reviewing the overall patterns, the indices severely tested their rising 40-day moving averages as well as price support on the hourly charts, held and for the rest of the day they bounced back and forth with an upward bias. 

We're at a critical stage in the rally in that they have an opportunity to break to the upside and take another leg up, before any meaningful sell-off, if yesterday's and today's lows are not taken out.

Support levels are 1639-42 zone on the NDX and the 1226-27 zone on the S&P.  Resistance is at 1659-60 on the NDX and around the 1238 zone on the S&P 500.

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.