The indices a damaging decline today, and most of the losses occurred in the afternoon.

The day started out with a slight gap up.  They quickly reached their early morning highs and then pulled back steeply, but that pullback held support.  Then they rallied just as sharply just before lunch hour, reaching the highs for the day, with the NDX making a nominal new 4 Ã,½-month high, but the S&P not able to get over yesterdayââ,¬â"¢s multi-year highs.  Then they started a precipitous drop, which quickly took the indices in the next couple hours down to test key support, at which point they did bounce.  But it was inevitable that eventually theyââ,¬â"¢d take out key short-term support. At the end of the day they came off the lows to snapback to that former key support area, which now may be resistance.

Net on the day, the Dow was down 80, the S&P 500 off more than 7, and the NDX down 10 Ã,½, with the Philadelphia Semiconductor Index (SOXX) losing nearly 2 percent, or 8.12.

Technicals were negative by 3 to 2 on advance-declines on New York and nearly 2 to 1 on Nasdaq.  Up/down volume was 5 to 3 negative on New York on a total of more than 1.6 billion.  Nasdaq traded 1.95 billion with about a little less than 2 Ã,½ to 1 negative plurality.

TheTechTrader.com board was very mixed, but the point-plus moves were mostly on the downside.  NVE Corp. (NVEC) dropped 2.36, IIVI 1.26, Rambus (RMBS) 1.06, and U.S. Global Investors (GROW) 1.71.

Other losses of note, the SMH gave back 88 cents, Dynamic Materials Corp. (BOOM) 72 cents, and Energy Conversion Devices (ENER) 78 cents.

On the plus side, Baidu.com (BIDU) gained 65 cents, but closed 3 points off the session high.  CTCI was up 57 cents, IMPH up 77 cents, and Xyratex (XRTX) 90 cents on more than 3 million shares.

Stepping back and reviewing the hourly chart patterns, the key to todayââ,¬â"¢s late afternoon action was that the rising moving averages were broken on both the S&P and NDX, as well as key short-term support.  Weââ,¬â"¢ll see whether thereââ,¬â"¢s downside follow-through or if they can stem the tide here.

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.