It was an extremely ugly down-day, adding to the now 3-day downtrend, and the indices closed at the lows for they day going away.

The day started out with another gap down. They did try to snap back, but failed rather quickly, plunged mid-morning, consolidated into the lunch hour, and then collapsed and dropped sharply in a three-fold type action until mid-morning at which point the best rally of the day materialized. They ran back up to overhead and failed, and then sold off very sharply in the last 40 minutes triggered by comments from Bill Gross of Pimco indicating he’s now a bear-market manager after 25 years of being a bond bull.

The technicals were extremely negative, particularly on New York, where advance-declines were negative by about 11 to 1, 275 up and 3071 down, one of the worst ratios we’ve seen in a long time.

As bad as that was, up/down volume was 1.8 billion to the downside and 103 million to the upside, or about 18 to 1.

Nasdaq technicals weren’t quite as bad, but still were extremely ugly, with a 4 to 1 negative ratio on advance-declines and more than a 6 Ã,½ to 1 negative ratio on declining over advancing volume. Of the heavy volume of more than 2.3 billion traded, more than 2 billion of it was to the downside.

TheTechTrader.com board was extremely negative, with just 5 issues on the plus side, one of them being a short ETF. The QID advanced 1.47, which would be expected in this bad of a decline. The only other stock on the plus side by more than a few cents was Research Frontiers (REFR), one of our portfolio positions, which advanced 33 cents on over 1 million shares, acting very well in a negative market.

The majority of stocks were down today. DXP Enterprises (DXPE) dropped 2.64, Zoltek (ZOLT) 2.32, Global Solutions (GSOL) 1.55, FuelTek (FTEK) 1.54, Color Kinetics (CLRK) 1.58, Cree Inc. (CREE) 1.69, NVE Corp. (NVEC) 1.32., Sigma Designs (SIGM) 1.50, and Transcend Services (TRCR) 1.10.

Other notables, MEDTOX Scientific (MTOX) fell 96 cents, Industrial Services of America (IDSA) 89 cents, DG FastChannel (DGIT) 48 cents, Chindex (CHDX) 45 cents, PRGX 74 cents, and USA Technologies (USAT) 49 cents.

Stepping back and reviewing the hourly chart patterns, a decisive penetration of the uptrend line, particularly on the S&P 500, occurred, and followed through to the downside, breaking 1505 and plunging towards the 1490 area, closing under 1491. The NDX closed at the exact tick low of the day at 1882.17, down 32.68. The S&P 500 was down 26.66, and the Dow down nearly 200 at 13,266 and change.

So, it was an extremely negative session, but the indices are now oversold on many of the indicators short-term, and may see a snapback bounce.

But as indicated a couple days ago I expected something more than just a short-term correction, which it may very well be, although I do expect a snapback rally to occur over the next day or two.

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.