The indices had a strong snapback session on Wednesday.  The day, however, started with an early move down in the morning that held support on the Nasdaq 100.  The S&P 500 did a lot better, holding at a much higher level.  That signaled a turnaround rally that lasted all morning into the early afternoon.  The NDX snapped back from 1654 to 1684, about a 30-point run from about 10 am to about 1 pm.  In that same three hour period the S&P jumped from about 1284 to about 1294.

In the afternoon they pulled back, tested successfully and then bounced around for a bit.  Just before the end of the session the S&P went to a nominal new high, but the Nasdaq trailed at that point, and in the last five minutes they pulled back from the afternoon rally highs.

But net on the day the Dow was up 68, the S&P up 9.63, the Nasdaq 100 a little less than 22, and the SOX up 7, about 13 points off the earlier low.  So, a reversal on  the SOX helped Nasdaq push forward mid-day.

The technicals were solid by a little bit more than 2 to 1 on New York on advance-declines, and about 3 to 2 on Nasdaq.  Up/down volume was 2 to 1  positive with 1. 6 billion traded on New York.  Nasdaq traded about 1.8 billion, with about a 3 to 2 positive ratio.

TheTechTrader.com board was mixed.  The stars of the day were Apple Computer (AAPL), up 2.24, and Broadcom (BRCM) up 1.54, trading on a 3 for 2 split basis this morning for the first time.

Energy Conversion Devices (ENER) advanced 1.62 on nearly 1.2 million.  China Automotive (CAAS) was up 79 cents on 1 1/4 million. Parlux Fragrances (PARL) gained 79 cents to a new all-time high today.  Nuance Communications (NUAN) to a new six-year high nearly reached 11 before pulling back a bit, but was up 56 cents on the day on more than 4 million traded.

Among other gainers, Dynamic Materials Corp. (BOOM) advanced 54 cents, and Applied Signal (APSG), one of our model portfolio stocks, up 49 cents.  Pacific Ethanol (PEIX) gained 36 cents, PW Eagle (PWEI) 32 cents and Rediff.com India (REDF) 31 cents.  Smith Micro (SMSI), one of our portfolio stocks, was up 28 cents, and TradeStation (TRAD) snapped back 31 cents.

On the downside, there were very few losses to report.  Viisage (VISG) gave back 22 cents, Evergreen Solar (ESLR) 28 cents, and DayStar Technologies (DSTI) 80 cents, the last two being in the alternative energy sector, which was weak today.  BioCryst Pharmaceuticals (BCRX) lost 39 cents.

Stepping back and reviewing the hourly chart patterns, the significance of today's action was that the NDX banged up against its six-week declining tops line of the current intermediate down-channel.  That's one of the reasons why I believe we had an afternoon failure to advance any further.  So that test is ahead of us, and if successful could lead to a much stronger extension of the rally.

The S&P has already taken out that line, pulled back and retested it, and today tested its 2006 high, coming within 0.72 of its January 11 high before backing off late in the session.

We're at key overhead resistance here and we'll soon see since whether the indices can make any additional headway & thrust through this more formidable resistance. 

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.