The 2005 downtrend continues, as each succeeding rally attempt has failed. The markets started out in a back-and-forth early pattern, tried to rally but failed right at resistance, and for the rest of the day they just went lower. In fact, the S&P 500 closed at the exact low for the day & the week. The Dow wasn't far off by just a couple points, and the Nasdaq was awfully close to the lows as well.

Net on the day the Dow was down 78 1/2, the S&P 500 7 1/2, the Nasdaq 100 down 11, the Composite off 11 1/2, and the SOX down about 5.

So, it was a very negative day across the board, although the technicals did NOT reflect that. Advance-declines were only 16 to 15 negative on New York and 17 to 13 negative on Nasdaq. Up/down volume was 9 to 5 negative on New York with 1.4 billion traded, and about 5 to 3 negative on Nasdaq on total volume of about 1.85 billion.

TheTechTrader.com board was mixed. Leading the way to the upside was Harmonic Lightwave (HLIT), one of our recent Charts of the Week, on an excellent earnings report and upward guidance, up 1.23 on heavy volume.

CrypoLogic (CRYP) was up 55 cents, Ariad (ARIA) on a Lehman Brothers recommendation up 73 cents, Parlux Fragrances (PARL) up 63 cents, Mikron (MIKR) 43 cents, and World Poker Tour (WPTE) up 38 cents.

On the downside, the only point-plus loser was Broadcom (BRCM), down 1.38. Other than that there were mostly just fractional losses.

Stepping back and reviewing the overall patterns, as indicated the indices kept sliding to new 2005 lows. The breakdown yesterday morning, which started with a breakaway gap to the downside, set the market off on a second wave down. However, Nasdaq is just about at the bottom of the intermediate down-channel, and the S&P is close as well.

Options expired today, and I suspect that early next week the market could reverse and come back up to retest resistance, although the trend is still down and won't be reversed until they take out key overhead resistance.

Good trading!

Harry

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.