The market ended mixed today, but they had a very nasty afternoon that gave back all of the morning's rally and then some on Nasdaq and most of it on the Dow and S&P.

The day started out with a strong rally that burst the indices, the S&P especially, to new rally highs.  The NDX failed to confirm at that point and we had negative divergences.  But the indices still maintained consolidation patterns that looked like they could move higher.  When no rally materialized after lunch, they rolled over very hard.  The NDX dropped from 1555 to 1533 inside of 45 minutes or so.  The S&P at that point dropped from about 1208 down to about 1200.  They both bounced from those levels, as they were support levels, but in the last hour sold off again to new lows for the day, with the S&P leading the way to the downside.

The S&P gave back all of its gain of 11 points, closing down 0.20. The Dow gave back 95 points of its gains, closing up just 16 today.  The Nasdaq, however, was the real loser today.  After being up as many as 14, it completely reversed and closed down 14.

The SOX Index was about 11 points off its high and down around 4.70 on the day.

Despite all that, the technicals managed to stay positive on New York by 3 to 2 on advance-declines and 7 to 6 on up/down volume on total volume of 1.4 billion.  Nasdaq, however, was a much different picture with 150 more decliners than advancers.  But the story was the up/down volume today.  With 1.8 billion traded, it was about a 2 to 1 negative ratio today. 

TheTechTrader.com board, which was up sharply in the morning, gave it all back except for a couple issues.

Kendle International (KNDL), a Chart of the Week this week, soared ahead to a new 2 1/2-year high, up 1.91 today, reaching as high as 15 before backing off late in the session.  QLogic (QLGC) was up 58 cents, but some 90 cents off the high, and Travelzoo (TZOO) was up 66 cents today, but that was more than 2 points off the high.

On the downside, Dynamic Materials (BOOM) was down 1.54, CryptoLogic (CRYP) 1.37, Able Energy (ABLE) 1.42, but the loser of the day was JAMDAT Mobile (JMDT), down 2.24.

Stepping back and reviewing the overall patterns, the 2 week head-and-shoulders top that had formed was broken as the neckline was taken out on the Nasdaq 100 at 1540, with the NDX closing 9 points below that, near the lows for the session. The S&P, after making a new 3-month high, sold off sharply and closed at the low for the day going as well, but has not violated any major support levels, although minor support at 1200 was taken out at the end of the day, as the S&P closed at 1197 1/2.

It's very conceivable that we had an important reversal today, as I had been expecting for the last couple days, but we'll have to see if there's downside follow-through tomorrow, and that will be key.

Levels to watch are the 1525-28 zone on the NDX.  That's the next level support I'll be keeping an eye, with 1540 and then 1548-50 being the levels of resistance.  On the S&P 500, short-term resistance remains in the 1200-02 area and then in the 1207-8 area.  Support on the S&P is the 1193-94 zone.  If that area is broken, and then the 1190-91 zone is taken out, then the SPX will have completed a reversal pattern and will probably heading lower.

Good trading!

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.