Stock Market Indices Stage Strong Morning Rally, but Close Off Highs

By: Harry_Boxer

The stock market indices staged a very strong rally in the morning when they gapped up strongly, formed bull flags, ran hard mid-morning, flagged again near midday, and then spiked up to the highs for the day near 1860 on the Nasdaq 100 and 1100 on the S&P 500. An afternoon rollover occurred in a 5-wave decline that closed them at the afternoon lows going away.

Net on the day, the Dow closed up 103.84 at 10,405.85, though that was 75 points off its earlier high. The S&P 500 was up 13.16 at 1092.54, closing about 7 1/2 points off its high. The Nasdaq 100 was up 23.86 at 1845.37, 15 points off its high.

Advance/declines, however, were nearly 4 to 1 positive, with 2400 up and 640 down on the New York Stock Exchange. Up/down volume was about 5 to 1 positive, with quite light volume of 975 million shares traded today. Nasdaq traded about 1 3/4 billion shares, and had a 4 to 1 positive ratio. Advance/declines were about 3 to 1 positive.

Charts of the Day:

Amtech Systems Inc. (ASYS) after stair-stepping higher since early July broke out earlier in the month, pulled back in a little flag, broke out again yesterday and followed through today. It made a new multi-month rally high, breaking out across key resistance going back 2 1/2 years. The next target is at the late '07 highs around 17.50-.75.

China Agritech Inc. (CAGC) had a big day today. It's been featured quite a few times in the last couple of weeks, but you'll see why. It broke out earlier in the month, backed off, held support, popped to resistance and backed off, and today popped once more, up 1.62 or 10.6% on a volume surge. I believe this stock is breaking out of a major base and could be up towards the 23 1/2 - 24 target on an intermediate basis. Short-term target is at about 19 1/2 - 20.

JinkoSolar Holding Co., Ltd. (JKS) has been in a very strong move since just after its listing. The strong trend started in early July around the 12 range. It's moved steadily, up another 2.23 today, breaking it out of a 5-day flag. It has momentum and looks like it could reach the 25 level, my short-term trading target. Intermediate target at 29 - 30.

RINO International Corporation (RINO) may be coming out of an important base pattern. Notice today's surge on 1.8 million shares, up 79 cents, or 5.3%. It may be coming out across key resistance line. If it does, I expect a quick move across 17, but my trading target is at 19, and intermediate target at 24.

Reviewing our Watchboard:

Overall, it was a bullish day today, and that was reflected on the TheTechTrader.com board, which had a stellar session. Leading the way today was Apple Inc. (AAPL) up 4.33 at 251.97, Google Inc. (GOOG) up 4.93 at 490.52, and Amazon.com Inc. (AMZN) 2.79 at 128.86.

Other point-plus gainers included a very strong percentage move for The LGL Group, Inc. (LGL) up 3.46 at 15.96. China Agritech Inc. (CAGC), one of our Charts of the Day, closed up 1.62 at 16.90. Cree Inc. (CREE) gained 1.71 to 58.31, Acme Packet, Inc. (APKT) 1.22 to 32.28, Pactiv Corp. (PTV) 1.66 to 32.58 on a takeover bid, and Westport Innovations Inc. (WPRT) 1.13 to 18.66.

On the downside, the ultra-short ETFs, obviously, got hammered, with the Direxion Daily Small Cap Bear 3X Shares (TZA) down 1.90 at 34.81, and the Direxion Daily Emrg Mkts Bear 3X Shares (EDZ) 1.18 at 34.80.

Stepping back and reviewing the hourly chart patterns, the indices had a very strong 5-wave rally today starting with a big gap up, but reached their rally highs near overhead resistance at midday and then backed off in a 5-wave decline to close at the afternoon lows.

Still, it was a pretty good session as a follow-up to yesterday. Today was a significant day with the indices moving back over key initial resistance and moving averages on the hourly charts, but secondary resistance proved to be more formidable, and they backed off in the afternoon.

We'll see what happens tomorrow and whether the bulls can take control in what is a key point in the trend for the indices.

Good Trading!

Harry

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.

(c) 2010 AdviceTrade, Inc. All rights reserved. Distributed only by written permission of AdviceTrade and The Technical Trader at info@advicetrade.com . In using any portion of Harry Boxer's content, you agree to the terms and conditions governing the use of the service as described in our disclaimer at http://www.thetechtrader.com

Mr. Boxer's commentaries and index analysis represent his own opinions and should not be relied upon for purposes of effecting securities transactions or other investing strategies, nor should they be construed as an offer or solicitation of an offer to sell or buy any security. You should not interpret Mr. Boxer's opinions as constituting investment advice. Trades mentioned on the site are hypothetical, not actual, positions.

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.