The indices suffered another down session on Tuesday, as the day started out with a brief bounce which rolled over into a sharp sell-off that successfully tested yesterday's lows. They then snapped back, but couldn't make it past initial resistance and sold off in a 5-wave decline until just after lunch when the indices hit their lows for the day.  The NDX took out 1697 support, trading as low as 1694.52, and the S&P got down below 1300 to around 1299, before they both bounced in mid-afternoon.  They pulled back with about an hour to go, and then snapped back again towards the close.

Net on the day most of the indices were lower, with the Dow down 53, the S&P 500 6 1/3, and the Nasdaq 100 nearly 5, despite the fact that the SOX Semiconductor Index managed to gain 1.42 today.

Advance-declines were about 2 to 1 negative on New York and about 15 to 14 negative on Nasdaq.  Up/down volume was 5 to 3 negative on the NYSE with 1 2/3 billion traded. Nasdaq traded heavy volume at 2.3 billion, but had about a 13 to 9 positive ratio of up versus down volume.

TheTechTrader.com board was very mixed, with both large gainers and losers.  On the plus side, ZRAN, on a terrific earnings report, gapped up and ran hard, closing at 29.13, up 6.50 on more than 17 million shares.  Endwave (ENWV), one of our portfolio positions, was up 2.08 on 3/4 million, breaking out of a 4-week flag pattern.  DXP Enterprises (DXPE), at 37.06, was up 1.76, and PW Eagle (PWEI), another portfolio position, was up 1.42 to 31.42 on nearly 1/2 million.

Other gainers of note, Sierra Wireless (SWIR) advanced another 69 cents on 1.4 million. Smith Micro (SMSI) jumped to a new multi-year high before backing off, but still closed up 45 cents.  Pacific Ethanol (PEIX) gained another 30 cents today on 10 million, but that was some 2 points off the earlier high.  Level 3 Communications (LVLT) on very heavy volume of 62 million shares was up 40 cents today.  Evergreen Solar (ESLR) advanced 43 cents on more than 2 million. Dynamic Materials Corp. (BOOM) hit another new all-time high this morning at 41.85, before closing at 41.23, up 47 cents on nearly 1/2 million.

On the downside, Optelecom-NKF (OPTC) lost 1.70, but the big loser today was Rambus (RMBS), which gave back more than 3 on nearly 10 million shares. Travelzoo (TZOO)  also gave back 1.21 on 4 1/3 million, and other losses of note, BioCryst Pharmaceuticals (BCRX) was down 56 cents, Forward Industries (FORD) down 77 cents, and there was a big negative reversal on IDSA, which soared this morning to 11.25, but closed at 8.20, down 79 cents on more than 2 million.

Stepping back and reviewing the hourly chart patterns, the indices broke short-term support on the S&P 500, rallied back to it and failed, but barely broke it on the NDX. 

We have a mixed picture.  But the trend has been down for the last four sessions, and we'll be watching key resistance at 1711 on the NDX and 1311 on the S&P.  Support is at 1695 NDX and 1299 S&P.

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.