The indices on Monday closed at the lows for the session on the Dow and S&P and right near the lows on the Nasdaq, as the 2005 sell-off continues. But believe it or not the last 3-4 days have seen a very steady orderly sell-off in a very distinct channel, and right now we're at the bottom of that channel and oversold short-term. So I do expect a rally tomorrow.
Today's continued sell-off to me was a surprise. I thought we'd turn around. But several rally attempts have failed at resistance as we've seen over the last few days, and the sell-off persisted again today.
The Dow closed down 24.38 and the S&P 500 down 4.12. The Nasdaq Composite fell 25 1/2 and the 100 nearly 23. The SOX Semiconductor Index was down 6.62, exacerbating Nasdaq's decline.
Reviewing the technicals, advance-declines were about 3 to 2 negative on New York, but 22 to 9 on Nasdaq. The Dow and S&P were up for most of the session, but Nasdaq just dragged them down in the last few hours. Up/down volume on New York was 3 to 2 negative and on Nasdaq it was 4 to 1 negative. Total volume was a little lighter today, about 1.6 billion on Nasdaq, and a tad under 1 billion on New York, just before the close. So not a high-volume selling climax, that's for sure, just slow steady selling.
Reviewing TheTechTrader.com board, almost all the stocks we follow had losses today except for a couple new ones. E-loan (EELN) on a deal with eBay (EBAY) was up 40 cents on 15 million shares. Quantum Fuel Systems (QTWW) on a contract with General Motors (GM) was up 13 cents. Sigma Designs (SIGM) was up 29 cents.
Other than that, nothing on my board was up today. On the losing side, Taser (TASR) was down 1.33, Nitromed (NTMD) 72 cents, Keryx Biopharmaceuticals (KERX) 84 cents, Harmonic (HLIT) 62 cents, and Applied Digital (ADSX) an astounding 58 cents, to close just above 4.
Stepping back and reviewing the overall patterns, the Nasdaq 100 closed at just about the 1480 level, which is the bottom of the 2005 down-channel and also near a key Fibonnacci retracement level. The S&P similarly closed below 1164 and at the bottom of its three-week down-channel, near a Fibonnacci retracement level as well.
So I do expect tomorrow could be turnaround Tuesday.
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.