The markets were quite volatile swinging down and then back up again and getting hit at the end of the day to close mostly lower on the session. The day started out with a gap down, and then we had a 5-wave decline that took us to the lows for the session around an hour after the opening. They bounced back, failed at resistance, and then retested, but that was successful. When that occurred the indices started an afternoon rally that was interrupted mid-way with a sharp set-back, with the set-back holding intraday moving averages.

Then a very strong rally ensued, going into the last 1/2 hour of the day, which took the indices back up towards key overhead resistance, with the NDX testing 1185 and the S&P 500 testing 780 key overhead resistance. That key resistance proved to be very formidable, as the indices backed off sharply into the last half hour giving back the vast majority of the afternoon rally.

Net on the day the Dow was down 80 to 7270, the S&P 500 was off 8.24, closing just under 765, and the Nasdaq 100 down 10.62 at 1160.83. The Philadelphia Semiconductor Index (SOXX), which was firm all day, managed to close up nearly 6 to over 205, and was positively diverging.

The technicals were negative by 3 to 2 on advance-declines on New York and 2 to 1 on Nasdaq. Up/down volume was nearly 2 to 1 negative on New York on total volume of 1 3/4 billion shares. Nasdaq traded just under 2.4 billion and also had 2 to 1 negative volume ratio.

TheTechTrader.com board was mixed, generally lower. Agrium (AGU) acquired CF Holdings (CF), which gained 6.19 while AGU dropped 3.73. Other stocks in that group, originally higher, gave back all their gains, with Potash (POT) dropping from a high of nearly 85 down to 80.66, closing down 1.64, and Mosaic (MOS) at 39.12 up 26 cents but 2 1/2 off its high.

Financials were strong until late in the session when they gave a chunk of it back. Bank of America (BAC) closed up 43 cents to 5.16, WFC jumped to 13.44, up 39 cents, reaching over $14 at one point, and JPM was up 71 cents to 21.73, but $1.50 off its high.

SunPower (SPWR) in a very weak solar sector was down 2.65, Energy Conversion Devices (ENER) fell 2.41 based on sharply lower session by First Solar (FSLR), which painted a bleak picture in their conference call about the upcoming quarter.

Amazon (AMZN) dropped 1.89 today, and Hartford Financial Services (HIG) gave back 97 cents in the financial sector.

On the plus side, the Direxion Large Cap Bear 3X Shares (BGZ) was up 2.13, and the UltraShort Real Estate ProShares ETF (SRS) gained 2.31.

There were very few other gains to speak of other than Apple (AAPL), which advanced 91 cents to 91.16.

Stepping back and reviewing the hourly chart patterns, the indices did well today to hold the 2-day rising trendlines and secondary price support, and rallied sharply. But the slide in the last half hour was a very negative way to end the session, and the indices are no where near out of the water, having yet to take out key overhead resistance.

On the plus side, the 2-week declining channel tops were taken out today. Although with the last half hour slide, they did close back beneath them, another negative technical occurrence for sure.

Good trading!

Harry

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