The markets opened strongly on Monday, backed and filled on Nasdaq and made higher highs in the morning on the S&P 500.  But around mid-morning they hit their peak for the session and it was downhill racer for the rest of the day. When the indices reached an intraday oversold condition near the 2006 lows on the Nasdaq 100 with about an hour to go, they got a last-hour snapback rally.  The S&P 500,which is holding up much better than Nasdaq, not only didnââ,¬â"¢t get below Fridayââ,¬â"¢s lows, it was some 45 points off the 2006 lows,a MAJOR positive divergence.

Net on the day the Dow was up 13, but that was about 60 points off the high.  The S&P 500 was up 1.86, about 7 points off its morning high.  However, the Nasdaq 100 was down 12.80, which was 23 points off the highs but about 7 points off the lows, snapping back in the last hour.  The Philadelphia Semiconductor Index (SOXX) was the culprit today, down 9.35 and putting a lot of pressure on the NDX all day.

There was a big difference in technicals on the two exchanges, with advance-declines 5 to 3 positive on New York and 16 to 13 negative on Nasdaq.  Up/down volume was about 7 to 5 Ã,½ positive on New York but 4 to 1 negative on Nasdaq.  Very distinctly different technicals today!

Total volume on New York was under 1.5 billion and on Nasdaq it was a little over 1.5 billion.

TheTechTrader.com board was very mixed, with some outstanding issues on both sides.  On the plus side, Standard Microsystems (SMSC) was up more than 4 points on nearly 4 million shares today on strong earnings and higher guidance.  Also on the plus side, low-priced Leading Brands (LBIX) was up 91 cents on nearly 1.2 million, snapping back to near its recently set all-time highs.

Other stocks on the plus side, Blue Dolphin (BDCO) was up 26 cents, and Radio Shack (RSH), one of our Charts of the Week, was up 55 cents on nearly 2 million.  PW Eagle (PWEI) was up 22 cents, Travelzoo (TZOO) 24 cents, and Zevex (ZVXI) 36 cents.

On the downside, Baidu.com (BIDU) dropped more than 3 points today and Sirenza Microdevices (SMDI) was down 1.07, with the India Fund ETF (IFN) down 1.02.

Stepping back and reviewing the hourly chart patterns, two distinctly different patterns exist on the NDX and SPX.  The SPX has been pulling back in a consolidative looking pattern for the last five days.  However, the NDX has sold off sharply, giving back all its gains, and actually retested its 2006 low this morning that was set four weeks ago. 

So, thereââ,¬â"¢s a critical support area around the 1511-12 range on the NDX and key short-term support at 1263-64 and then 1260 on the S&P.  Weââ,¬â"¢ll be watching those levels tomorrow to see if they can hold.  Any violation of those levels could lead to a nasty additional sell-off.

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.