The indices suffered losses steadily all session and closed the day going away at the lows for the day and right above key support on the NDX and S&P.  So we'll have some severe testing to do tomorrow.  Unless these levels hold, the indices have a shot at a breakdown and another leg down which I view as potentially the final leg down of this decline.

The Dow closed at 10,070, down 128 1/2.  The S&P 500 at 1143 and change was down more than 13.  The NDX at 1409 and change was down nearly 14 1/2, and the Composite was down 26 1/4 at 1904.  The SOX Index, which had been up about 4 points early in the day, closed down 3.39 at 3484.34.

The technicals were negative by 22 to 10 on New York and 23 to 8 on Nasdaq, nearly 3 to 1 there.  Up/down volume was much worse by about 4 1/2 to 1 on New York with a total of 1 3/4 billion traded -- heavier volume on the downside today.  Nasdaq was about 4 to 1 negative with about 1.5 billion down and about 335 million up on a total of more than 1.85 billion traded.

TheTechTrader.com board, needless to say, had a very negative session.  QLogic (QLGC) was down 1.78, but that snapped back 1.30 in the last hour.  Dynamic Materials (BOOM) was down 89 cents, Energy Conversion Devices (ENER) down 78 cents, CryptoLogic (CRYP) down 91 cents, and JAMDAT Mobile (JMDT) 75 cents.

In the large-cap sector Microsoft (MSFT) gave back 54 cents, Intel (INTC) 32 cents, and Juniper Networks (JNPR) 48 cents.

Stepping back and reviewing the overall patterns, the pattern of the last couple weeks has been a consolidation/basing attempt, which was very similar to what we saw at the end of March/beginning of April.  Unfortunately, that pattern broke down. If things remain the same we'll have a breakdown below key support just beneath us and take a final leg down into lows below 1400 on the NDX and below 1138 on the S&P.

If that occurs, I expect that to trigger some stops and then perhaps some mini panicked selling and perhaps an end to the current sell-off.

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.