The indices ended down on the session and had a very negative afternoon.  The morning session, however, was consolidative in nature.  They started off lower from the get-go, then rallied, failed at resistance, and bounced around until after lunch hour.  At that point, the formations appeared to be bear flags, and when they broke to the downside they gave it very fast.  The indices dropped sharply in less than a half hour, with the Nasdaq 100 falling from 1687 to 1665, or 22 points, in that period, and the S&P 500 dropped from about 1285 to 1276.

In the last couple hours they bounced around attempting to rally, but rather feebly and rather corrective looking.

Net on the day, the Dow cracked below 11,000 and closed at 10959, down 62 1/2.  The S&P 500 dropped nearly 9 points.  The Nasdaq 100 fell 14 1/3, and the SOX index was down more than 9 points today, certainly adding pressure to Nasdaq.

The technicals were negative by 23 to 10 on advance-declines on New York and 19 to 11 on Nasdaq. Up/down volume was more than 2 to 1 negative on New York on total volume of about 1.6 Billion.  Nasdaq traded over 2.1 billion with a little less than 2 to1 negative ratio.

TheTechTrader.com board was very mixed.  On the plus side, Endwave (ENWV) was up 1.77 on more than 1 1/4 million, and low-priced Ronson (RONC) was up 1.04 on more than 1 million.

Other stocks of note, Evergreen Solar (ESLR) hit a new all-time high today, backed off at the close, and still was up 64 cents on the day on 4 1/2 million.

Portfolio position Novavax (NVAX) was up 37 cents on nearly 5 million, and another of our positions, TradeStation (TRAD) gained 60 cents on nearly 4 million.

On the downside, loss leaders included Apple Computer (AAPL) down 2.24, Energy Conversion Devices (ENER) 1.55, and Broadcom (BRCM) down 75 cents.

Other losses of note, PW Eagle (PWEI) gave back 1.57, BioCryst Pharmaceuticals (BCRX) 55 cents, Rediff.com India (REDF) 79 cents and Versant (VSNT) lost 44 cents today.

Stepping back and reviewing the hourly chart patterns, the indices broke key short-term support and sold off sharply.  Unfortunately, the rally back attempt was corrective-looking and could result in further downside.

Resistance to watch is now in the 1680-83 zone on the Nasdaq 100, and 1284-5 area on the S&P 500.

Support near today's lows at 1665, if broken, could lead to further damage down in the 1655 area on the NDX.  S&P support, currently in the 1275-6 area, if broken, could lead to a test of secondary support near the 1270 area.

Those are the levels we'll be keeping an eye on 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.