The markets experienced a very negative session to start the week and closed at the lows for the day going away.   The day started out with a gap down and a 10-minute brief bounce, but that was about it.  A very sharp sell-off ensued, taking the NDX and S&P through important short-term support, and the rest of the day was spent stair-stepping lower.  Over the last couple hours they did actually stabilize, but again slipped lower in the last 10-15 minutes, as they rolled over and closed at the low for the day.

The Dow was down more than 158, the S&P 500 down 19, and the NDX more than 40 1/3.  The Philadelphia Semiconductor Index (SOXX) was down 11.50.

The technicals confirmed the negative session with a 27 to 6 negative ratio on advance-declines on New York and about a 25 to 6 ratio on New York.  Up/down volume was worse, with 1.4 billion down and 180 million on New York, a negative ratio of about 8 to 1.  Nasdaq, with 1.8 billion on the downside and only 135 million on the upside, had a very strong negative ratio of nearly 14 to 1.

TheTechTrader.com board obviously was mostly negative.  Loss leaders included E-Future Information (EFUT) down 2.43, NVE Corp. (NVEC) 2.42, Sigma Designs (SIGM) 1.82, Gmarket (GMKT) 1.49, Fuel Tech (FTEK) 1.28, Energy Conversion Devices (ENER) 1.08, Chindex (CHDX) 1.02, and Qiao Xing Universal Telephone (XING) down 1.11 as well.

On the plus side, there was very little to speak of.  SVI, one of our portfolio positions, did gain 35 cents today in anticipation of its name changed to Jamba Juice and listing on Nasdaq as of this coming Wednesday.  FTGX was up 54 cent and ASIA up 20 cents. The GLD gold ETF did manage to eke out a 17 cent gain today as well.

Stepping back and reviewing the hourly chart patterns, the day was an important session and we may have gotten the downside thrust that broke the back of the trend, certainly the back of the last 3-week trend. Next downside support at 1760 NDX and 1375 S&P will be monitored closely.  Upside resistance is at 1800-05 NDX and 1390-95 on the S&P 500.

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.