The markets had another difficult session on Monday, as the week started off on a down note.  The day started out with a morning decline that severely tested support but held.  A mid-morning rally ensued that failed at resistance, and then they got real quiet into the lunch hour.  In the afternoon, the indices rolled over and came down hard, taking out the lows and support, and a last-hour snapback ensued that retested resistance but once again failed, and they were pulled down at the close.

The Dow, at the end of the day, was down 72.5.  The S&P 500 was down about 11.5, and the NASDAQ 100 nearly 14.  The Philadelphia Semiconductor Index (SOXX) was down about 4 1/3. 

The technicals were decidedly negative by 3 to 1 on advance-declines on New York, and a like amount on Nasdaq.  Up/down volume was 4 to 1 negative on the New York Stock Exchange, with a total of about a little over 1.5 billion traded.  On Nasdaq it was about 3 to 1 negative, with a total there of just short of 1.7 billion.

TheTechTrader.com board was mixed but mostly negative, with several outstanding issues today. Medifast (MED) was up $1.70 on more than a million shares, and Mikron Infrared (MIKR) was up $1.14. 

PW Eagle (PWEI) was up $0.91 on 3/4 of a million and Pacific Ethanol (PEIX) was up $0.71 on 3.8 million.  Parlux Fragrances (PARL) advanced $0.33, but that was pretty much it for the upside on our board.

On the downside, Baidu.com (BIDU) got hammered for nearly 4 points today.  Recent Boxer Shorts and Charts of the Week Allegheny Technologies (ATI) was down $3.45 and FreightCar America (RAIL) down $2.77.

Other stocks of note on the downside:  DXP Enterprises (DXPE) lost $2.29, Dynamic Materials Corp. (BOOM) $1.30, Energy Conversion Devices (ENER) $1.33, and the GLD, gold tracking stock was down $1.32.

So, a negative day on the Street for sure. 

Stepping back and reviewing the hourly chart patterns, the indices still have a chance of creating bottoming-type patterns, if they can hold right near these levels, as the 40-day moving averages are being tested on the hourly charts and what could be right shoulders of head & shoulder bottoming patterns, potentially. 

But unless they get back up above the 1575 area on the NDX and above 1260-62 on the S&P, and complete the potential bottoming patterns, the jury is still out on whether that will occur.

Support beneath here is at the 1518-20 zone on the NDX, and the 1220 area on the S&P.  Those are key because if they're taken out, I would expect a lot lower prices to occur, and the intermediate downtrend to continue.

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.