The markets had a very negative follow-up to yesterday's sharp rally, and other than the opening burst, the indices moved lower, in a distinct downward channel all session  and closed at the lows for the day going away. 

The day started out  with a gap up, but they sold off sharply almost immediately.  They bounced mid- to late morning, and failed right at resistance and then moved steadily lower the rest of the day.  Net on the day, the Dow was down 83.3, the S&P 500 nearly 10.70, the Nasdaq 23.70, and the Philadelphia Semiconductor Index (SOXX) down 10.38, or 2.5%, and that really hurt Nasdaq today.

Technicals were decidedly negative by a 22.5 to 10 on advance/declines on the New York Stock Exchange and 22.5 to 7.5 on Nasdaq.  Up/down volume was 3 to 1 negative, with a total of about 1.23 billion traded in New York and 2.1 billion traded on Nasdaq, with about 1.7 billion to the downside, or a more than 4 to 1 negative ratio.

TheTechTrader.com board was extremely negative today, other than a couple of stocks that had good news today.  On the plus side, Apple (AAPL) was up $6.40, and Avici Systems (AVCI) up $1.88, both on heavy volume and both on positive earnings-related news.

Other than that, all stocks on my board were down, except for Key Tronic Corp. (KTCC), which advanced $0.41.

On the downside, loss leaders were Travelzoo (TZOO), which got slammed for $6.25 after their earnings release. Baidu.com (BIDU) fell $2.86, DXP Enterprises (DXPE) $2.19, Hanson (HANS) $2.34,  PW Eagle (PWEI) $1.80, and the gold tracking stock (GLD) down $1.49, with the India tracking stock (IFN) down $1.69. 

So, it was a pretty negative day on Wall Street and especially in light of yesterday's rally.  Pullbacks were deeper than anticipated and we may see some deeper tests.  The S&P and Dow are holding up a lot better than the Nasdaq at this point, and we'll see if they can stem the Nasdaq tide or whether they're going to make lower lows at this point, but not a good session and certainly not a good follow-up to yesterday's rally.

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.