The market finally had its first solid down-day of 2006. But it was a struggle to get them to go lower.  Although the indices initially went lower based on pre-opening futures, they then firmed up and bounced around in a very narrow range until a couple hours to go.  The market got very narrow and then headed south, and did so with a vengeance.  They broke to new session lows in the early afternoon, selling off sharply, taking out a couple minor levels of support.  But key secondary price and moving average support held, and the indices bounced around in the last hour, refusing to go much lower, although the blue chips did make nominal new lows.

Net on the day, the Dow was down 81, the S&P 500 8, the NDX 11 and the SOX Semiconductor Index down 7.

Technicals confirmed the decline today, with advance declines negative bye 21 to 11 on New York and 18 to 11 on Nasdaq.  Up/down volume was 2 1/2 to 1 negative on New York on total volume of about 1.6 billion. Nasdaq traded just about 2 billion shares, with about a 4 to 3 negative ratio.

TheTechTrader.com board, as a result, was mixed.  Standouts today were in the alternative energy sector, where legislation was passed in their favor.  Energy Conversion Devices (ENER) soared to a new all-time high at 53.65 early in the morning, backed off 3 points but still was up more than 2 today on more than 5 million shares.

DayStar Technologies (DSTI) advanced 1.49 and Evergreen Solar (ESLR) was up 22 cents, but about 1.30 off its earlier high.  A big reversal there.

Other stocks of note, Rambus (RMBS) advanced another 1.52 today. Astea International (ATEA) was up 46 cents, and Nuvelo (NUVO) up 31 cents.

On the downside, the semiconductors were led by Broadcom (BRCM), which had a new six-year high at 59, reversing, and closing at 56.95, down 1.64.  Neoware Systems (NWRE) gave back 1.23 and Viisage (VISG) a dollar on news of its acquisition of Identix.

Radvision (RVSN) was off 97 cents, Sify Ltd. (SIFY) lost 91 cents, and Dynamic Materials Corp. (BOOM) gave back 95 cents.

Stepping back and reviewing the hourly chart patterns, the indices finally bent and broke, taking out 21-day moving average support on the hourly charts, which has held during the entire 7-day advance, and the S&P even tested the 40-day moving average support and price support at 1285-6.

If the rally is going to continue, it's going to have to halt the decline right here, but it sure looks like we may have begun the process of pulling back and retesting lower levels, and we'll see if there's a downside follow-through tomorrow.

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.