Stock Market Rally Ends With a BANG!

By: Harry_Boxer

The rally abruptly ended today and with a bang, as the indices opened sharply lower on very negative pre-market futures. They dropped precipitously in the morning, bounced around mid-day to try to consolidate, and even tried a mid-day rally. When that failed they sold them off in earnest, as the indices cascaded in the last hour, the Nasdaq 100 dropping from 1128 to 1093 just in the last hour alone, and the S&P 500 dropping from 850 to 815 over that same period of time and closing not far from there.

Net on the day the Dow was down 680 to 8149, the S&P 500 down 80 to 816, and the Nasdaq 100 down nearly 95 to 1091. The Philadelphia Semiconductor Index (SOXX) was down 15, a very big percentage loss, closing at 183.24.

The technicals were extremely negative, with 2809 issues down on New York and 357 up. On Nasdaq that was 2441 to 460. Up/down volume was 80 to 1 negative on New York with 1.6 billion to the downside and just 20 million to the upside on total volume of 1.6 billion plus. That's the worst I've ever seen in terms of volume ratios. Nasdaq had 45 million shares up and 1.872 billion shares down, which is almost 40 to 1 negative, on total volume of around 1.9 billion.

TheTechTrader.com board was extremely negative, except for the ultrashort ETFs, which had a stellar day. The Direxion Large Cap Bear 3x (AMEX: BGZ) at 86.74 was up 17.44, and is my Chart of the Day today.

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The QID at 85.07 was up 11.21, the SDS at 103.40 was up 15.19.

The only stock on my board that was up another than the inverse ETFs was Rambus (RMBS), which rose 1.08 to 11.39 on 8 million shares.

Leading the way to the downside were the agriculture stocks, which got hammered today. CF at 44.22 was down 8.41, AGU at 27.53 was down 3.89, MOS 25.40 was down 4.95, and POT at 56.47 was down 5.17.

Other stocks of note, SPWR at 28.62 was down 6.11 in a very weak solar group, as Canadian Solar (CSIQ) dropped 1.03 to 4.53 and Solarfun (SOLF) dropped 1 to 4.70.

Other losses of note, Sequenom (SQNM) at 14.07 was down 2.64, United (UAUA) at 8.94 was down 2.31, RIMM at 39.80 down 2.67, MS in a very weak financial group at 11.35 down 3.40, C at 6.45 down 1.84 and BAC smacked back to 12.85, down 3.40, on 123 million shares.

AAPL dropped 3.74, AFAM down 3.43, and the EWZ down 4.10 today. The DIG got slammed on weak oil, down 6.43, and BGU lost 9.72 to 27.70.

That's just the tip of the iceberg. It was one of the weakest days I've ever seen, and certainly an extremely negative way to start the week. Important cycle lows due in this timeframe could mean that we possibly have an inverted cycle where we're headed down for a few days.

Good trading!

Harry

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