The stock market closed down on the day and had a definitive afternoon decline. The indices closed right at key support, and the next day or two may be critical to the short-term direction of the market. If they do not hold these levels, we could see a much deeper retest of lower levels.

The day started out with a quick rally that took the NDX & SPX to new 7-year highs. The indices then consolidated for the rest of the morning and into early afternoon, attempting to break out just after lunch, which failed right at the previous morning highs. They then rolled over rather sharply, bounced with an hour to go, rolled over again in the last hour again, and closed at the lows for the day going away.

The Dow was down 14.30, some 80 points off its earlier high. The S&P 500 was down 1.84, closing about 10 points off its high. The Nasdaq 100 was down 12, about 21 points off its high, and the Philadelphia Semiconductor Index (SOXX) was negative all session, down 6.41 and pressuring Nasdaq all day.

The technicals confirmed the decline, negative by 3 to 2 on advance-declines on New York and on Nasdaq, but only 8 to 7 on down volume over up volume on New York and 12 to 7 on Nasdaq. New York traded 1.57 billion shares, and Nasdaq traded about 1.95 billion.

TheTechTrader.com board was mostly narrowly mixed with some outstanding gainers and losers today. On the plus side, Cypress Bioscience (CYPB) on positive drug news traded 30 million shares and vaulted nearly 8 points, about 94%.

DXP Enterprises (DXPE) continued its winning ways, up 1.51, although that did pull back about 1 Ã,½ from earlier in the session when it was up more than 3.

Jones Soda (JSDA) snapped back sharply. It was up nearly 2 Ã,¾ earlier and closed up 1.65. NVE Corp. (NVEC) closed up 2.28 today.

Other gainers of note, Taser (TASR) advanced 32 cents on heavy volume after a positive court ruling. Metabolix (MBLX), a current portfolio position, was up 48 cents, and old favorite China GrenTech (GRRF), a Chinese telecom, was up 62 cents. FuelTek (FTEK) gained 55 cents and AsiaInfo (ASIA) up 59 cents to a new 18-month high.

On the downside, point-plus losers were MedTox (MTOX), which got hammered late in the session, dropping 2.60 on the day. Synalloy (SYNL) lost 1.81, ValueClick (VCLK) 2.37, and Zoltek (ZOLT) dropped 3 points from its high in the morning when it was up 1.20, closing down 1.81. Energy Conversion Devices (ENER) gave back 1.41.

Other losers of note, Sigma Designs (SIGM) dropped 81 cents, Vasco Data (VDSI) 74 cents, DG FastChannel (DGIT) 57 cents, and Dendreon (DNDN) 34 cents. Chindex (CHDX) lost 36 cents. The SMH dropped 67 cents today.

Stepping back and reviewing the hourly chart patterns, the six-day rising trendlines were decisively broken in the afternoon. They rallied back to those lines, failed and rolled over, closing at the lows for the day going away at key 3-day support.

Tomorrow may be a key session in the trend. If support holds here they could rally sharply, but a break could lead to substantially deeper levels.

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.