The indices ended on a down note, closing near the afternoon lows and the lows of the session in what I would call a very poor follow-up to yesterday’s rally.

They started out a little firmer, got near yesterday afternoon’s rally highs, then went into a three-wave decline that pressured support but held. Then they had a rally back up in mid-afternoon to retest yesterday highs on the NDX. They actually took them out on the S&P and Dow, but did not get confirmation from the NDX. When that occurred I noted that it could result in an afternoon sell-off, which we certainly got. They had a three-wave decline into the close, with the S&P, in particular, closing right at the afternoon lows.

Net on the day, the Dow was down 15 Ã,¼, the S&P 500 3 1/2, and the Nasdaq 100 7. The Philadelphia Semiconductor Index (SOXX) was down a little more than 2.

Technicals were flat as a doornail, with about 50 more issues lower on the NYSE. Up/down volume was flat, just slightly to the downside. Nasdaq was much worse, with advance-declines 450 issues lower, and up/down volume 2 Ã,½ to 1 negative. Total volume on Nasdaq was 1.94 billion, and on New York was a little less than 1 2/3 billion.

TheTechTrader.com board was very narrowly mixed on the session. On the plus side, Energy Conversion Devices (ENER) on an upgrade by Jeffries, was up 2.28 on 3.7 million, a very strong session. China Development Group (CTDC), after announcing a sweeping change in its board of directors, was up 1.22 on nearly 2 million shares. Take-Two (TTWO) jumped 1.34 on 19 Ã,¾ million today.

Other than that nothing was up much more than small fractions. Halozyme Therapeutics (HTI) managed to gain 19 cents and Mamma.com (MAMA) gained 37 cents. However, it was up an additional 80 cents in the aftermarket after releasing surprisingly excellent earnings. Sigma Designs (SIGM) advanced 14 cents and closed over 28.

On the downside, Home Inns & Hotels (HMIN) backed off 65 cents after being much higher in the morning, following their earnings report. Global Sources (GSOL) backed off 48 cents.

Stepping back and reviewing the hourly chart patterns, the bounce off the lows and the oversold conditions yesterday got a very poor follow-through today. Although the indices broke initial support, they did hold at the morning session lows, which at this point are key levels.

A break of those levels tomorrow could be indicative of a much deeper retest of the earlier lows. Or, if they can hold them and takeout today’s highs, there could be a much stronger snapback rally. The jury’s still out on that.

But right now the poor close does not augur well for tomorrow.

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.