The markets were pressed hard this morning, with some of the indices moving to new lows, especially the NDX.  But when the S&P did not confirm, the market staged a sharp initial recovery which was followed by a flag pattern/consolidation, and then they roared up the ally for the rest of the afternoon.

The NDX recovered from 1394 to 1422, closing at nearly 1421, up 11 1/2 on the day, but the Dow was the story today, jumping from 10,048 to 10,192, up 122 on the day and just 4 points off the session high.  The Nasdaq Composite was up 17 1/2 and the 100 up 11 1/2, and that was some 26 points off the low today.

The Composite jumped from 1889 and change at the low to 1921, up 17 1/2 on the day, and the SOX Index, which had been down all day, rallied from 376 to 385 and change, a 9-point reversal, up 1.30 on the day after being down almost 7.

So, an impressive afternoon rally fed by some short-covering and month-end window dressing.

The technicals, which were down in the morning, reversed sharply and closed at about 2 to 1 positive on New York and about 3 to 2 positive on Nasdaq.  But up/down volume was the story today.  Total volume on New York was over 1.8 billion, with about a 2 1/2 to 1 positive ratio.  Nasdaq was about 2 to 1 positive, with more than 2 billion traded. 

So, heavy volume on the upside with a strong reversal, and the indices proved their metal today despite it being a Friday. 

TheTechTrader.com board today was very mixed, as would be expected on a day like this, but there were some outstanding issues.

Low-price semiconductor stock Zoran (ZRAN), which we followed and traded today, had a terrific day with strong relative strength all day.  It closed up 1.57 on 6.2 million shares, by far the best performer on my board today.

Microsoft (MSFT) was very strong today and was a major part of the reversal, holding strong all morning during the downtrend and closed up 85 cents at 25.30 on 95 million shares.

In the semiconductor sector, Broadcom (BRCM) advanced 34 cents, Intel (INTC) 33 cents, and they helped the SMH get back into the positive column by only 4 cents, but that was about 60 cents off the earlier low.

Other stocks of note, Dynamic Materials (BOOM) advanced 56 cents and junior biotech Elan Corp. (ELN) was up 82 cents.

On the downside, the loss leader was CryptoLogic (CRYP) down 1.23.  In the alternative energy sector, DayStar Technologies (DSTI) down 63 cents and Energy Conversion Devices (ENER) down 31 cents, along with Evergreen Solar (ESLR) down 13 cents.

With the price of oil coming down sharply today and closing back under $50 a share, that group was weak.

Stepping back and reviewing the overall patterns, the story today was that we had minor breakouts on the S&P ,but no confirmation from the NDX yet, which closed right at a key resistance level near 1420.  But the buyers came out and played today, and we'll see if they can continue to do so on Monday.

The areas to be watching again are the 1420-22 zone and then the 1429-30 area on the NDX.  On the S&P 500, resistance at 1160 and then the 1164-65 zone will be the areas to keep an eye on early next week.

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.