The indices had a very strong afternoon rally, after making new pullback lows on the NDX this morning. Of course, the S&P did not confirm that, because it was way above, and we had pointed out that positive divergence yesterday.
The day started out with a move down. They backed and filled, and went lower. They then bounced feebly, failed at resistance and rolled over, but held the morning lows in the early afternoon, and that triggered a very strong rally. They did pull back and retest, but held support and then closed very strongly in the last hour. Only a last 10-minute pullback brought them off their highs for the day.
Net on the day, however, the Dow was 107 points off the low and up 31 on the day. The S&P was 13 points off the low, up 5. The Nasdaq 100 was 25 points off its low, up 12 and change. And the SOX index, which was the story today, was up 13.65, or about 3.5%, and closed 18 points off its morning low. That really helped Nasdaq get going, and so the SOX and the NDX led the way today.
Technicals moved back into the plus column, by 5 to 3 positive on New York, but just 17 to 13 positive on Nasdaq, however. Up/down volume was about 8.5 to 7 positive on New York, with a total of about 1.55 billion traded. The Nasdaq had the big day today, with up/down volume a little less than 2 to 1 positive on total volume of 2.2 billion traded today.
TheTechTrader.com board was very active, mostly higher. There were some outstanding issues. Hanson Natural (HANS), which split four-for-one today, jumped nearly 6 points off its morning low, closing up $4.36 on the day on 12 1/3 million, the star of the day .
Baidu.com (BIDU) jumped more than 5 points off its morning low, closing up $1.93. Among other point-plus gainers, Travelzoo (TZOO) was up $1.34, PW Eagle (PWEI) up $1.24, and the GLD gold tracking stock was up $1.79 today.
Other stocks of note, the SMH advanced $0.92, Broadcom (BRCM) $0.99, Northfield Laboratories (NFLB) $0.97, and Simclar (SIMC), one of our recent Charts of the Week portfolio positions, up $0.98. Vertex Pharmaceuticals (VRTX) was up $0.62,Standard Microsystems (SMSC) $0.73, and Qualcomm (QCOM) also advanced $1.07 today.
On the downside, Energy Conversion Devices (ENER) dropped $1, the IFN India Fund was down $0.55 on news of terrorist bombings, and Radio Shack (RSH) gave back $0.47 from yesterday's rally. Smith Micro (SMSI) was down $0.30.
Stepping back and reviewing the hourly patterns, the indices finally broke out late in the afternoon and retested the six-day declining tops line and 40-day moving average on the hourly charts on the NDX. The S&P surged back up through its declining tops line and moving averages late in the session, and that augers well for continuation of the rally potentially, but we need to get a follow-through tomorrow.
We'll see how it goes.
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.