The indices went through a consolidation-type day after yesterday's strong rally because the indices could not follow through today.  They backed off sharply in the morning, snapped back to retest the highs, couldn't get through, and then drifted for a couple hours.

After lunch hour when the indices couldn't mount a rally, they sold off to new lows for the day, holding the 2-day trendlines and moving average on the hourly charts.  Then a slight bounce before the close brought them back from the lows.

Net on the day the Dow was down 30 3/4, the S&P 500 1 3/4, the NDX 4 1/2, and the SOX a little less than 4, or almost 1 percent.  That pressured Nasdaq for most of the day today. 

However, the technicals were positive by 18 to 14 on New York, a positive divergence, and 15 to 14 on Nasdaq.  Up/down volume was slightly positive with a little less than 1.3 billion traded.  Nasdaq traded a little more than 1.6 billion, with about an 8 to 7 positive plurality.

So at the end the technicals were able to turn positive despite the fact that all the indices were lower.  That's unusual and more indicative of a consolidation day and potentially higher prices ahead, at least a retest of the highs before we see any further downside damage.

TheTechTrader.com board was very mixed.  On the plus side, a new one we're following, which broke out today, was Universal Display Panel (PANL), up 77 cents. It broke out across multi-month highs.  Millennium Pharmaceuticals (MLNM), one of our recent Charts of the Week, was up 74 cents on 17 million shares after they announced a new CEO.

CryptoLogic (CRYP) advanced 52 cents.  Amylin Pharmaceuticals (AMLN), another one of our recent Charts of the Week, was up 79 cents.  And Vertex Pharmaceuticals (VRTX) was up 28 cents.  So the junior biotech and pharmaceutical group was strong today.

On the downside, junior energy stocks Georesources (GEOI) was down 1.18 and Able Energy (ABLE) down 1.03.  Dynamic Materials (BOOM) was off 1.16.  Internet Initiative Japan (IIJI) fell 57 cents, JAMDAT Mobile (JMDT) 42 cents, Energy Conversion Devices (ENER) 59 cents, and DayStar Technologies (DSTI) 49 cents in the alternative energy sector.

Stepping back and reviewing the overall patterns, as indicated earlier, today's action on the hourly charts was more corrective and consolidative in nature, and should lead to at least a test of higher prices before any further downside damage.

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.