The markets had a very difficult day and ended not far from the lows for the session. The day started out with back-and-forth volatility in the morning. We then hit the morning lows just before lunch hour and rallied from there on into mid-afternoon but could not take out the morning highs. When that was apparent in the afternoon the markets rolled over hard.

The NDX sold off from 1565 to 1543, 22 points, in about an hour. The S&P went from 1187 to under 1176, about 11 points, in the same period of time. Just a late bounce brought them off the lows but not by much.

The Dow was down 112, the S&P 500 10, the Nasdaq Composite 22 and the Nasdaq 100 off 20 1/2, with the SOX Semiconductor Index down 5.66.

It was a very ugly afternoon and bad way to end the session. Repeatedly the indices failed to get through their 40-day declining moving averages on the hourly charts. When that occurred traders just threw in the towel.

The technicals weren't as bad as one might think. Advance-declines were 17 1/2 to 15 negative on New York and about 7 to 4 negative on volume, but total volume was a little lighter at 1.2 billion. Nasdaq volume was also a little lighter, a little less than 1 3/4 billion, but 1.15 billion of it to the downside, or a little less than 2 to 1 negative.

TheTechTrader.com board had some outstanding issues today despite the market sell-off. Taser (TASR) exploded today on positive news from the Pentagon, ending up 3 3/4 on nearly 70 millions shares, about a point off the high.

Parlux Fragrances (PARL) was up more than 2 points today, retesting its all-time high. Very strong relative strength displayed there. Biotech stock and one of this week's Charts of the Week Keryx Biopharmaceuticals (KERX) was up 3/4, acting very well and near its highs. Medicore (MDKI) snapped back 59 cents. Biolase Technologies (BLTI) had a tremendous afternoon, exploding from about 9.82 to 11.14, closing at 10.83, up 95 cents.

On the downside, loss leaders were Nitromed (NTMD) down 97 cents, Spatialight (HDTV) hammered for another 58 cents on a downgrade, CryptoLogic (CRYP) off 63 cents and Broadcom (BRCM) down 71 cents. Microsoft (MSFT) continued weak and was pressuring the indices, down 51 cents today.

Stepping back and reviewing the overall patterns, the key again is that the market failed to get through overhead resistance and finally gave it up in the afternoon, exacerbated by General Motors (GM) earnings guidance perhaps.

But the indices closed just above yesterday's lows, which are also 2005 lows. It would be very important if they hold this level. If not, it looks like we're headed down to lower levels. Targets would be 1520-25 NDX and 1168-70 S&P.

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.