The indices closed with a strong gain, near the highs for the day, but the day started out very differently. The pre-opening & overnight futures were down sharply, the indices gapped down big, retested Monday's lows, made higher lows and then rallied sharply in the morning, and that carried right through to about noon. They did back off after the lunch hour, but came on again and made higher highs, had a very sharp pullback with about 45-50 minutes to go, but held the earlier reaction lows and came on again and closed sharply higher.

Net on the day the Dow was up 152.68 to 7761.60, about 280 points off its low. The S&P 500 was up 13.17 to 811.04, about 28 points off its low, and the Nasdaq 100 ended up 15.15 to 1252.51, 41 points off its low. So, big reversals as the indices closed very near the session rally highs. The Philadelphia Semiconductor Index (SOXX) advanced 2.96 to 233.87.

Reviewing the technicals, advance-declines were positive by more than 3 to 1 on New York and about 2 to 1 on Nasdaq. Up/down volume was 5 to 1 positive on New York on total volume of 1 1/2 billion. Nasdaq traded 2.14 billion and had a 3 to 1 positive volume ratio.

TheTechTrader.com board was mixed. Agriculture stocks were firm, with Potash (POT) at 82.93 up 2.12, Mosaic (MOS) at 42.93 up 1.95, and Agrium (AGU) at 37.37 up 1.58.

Apple (AAPL) gained 3.57 to 108.69. Cree Inc. (CREE) jumped 1.70 to 25.23 on takeover rumors. Best Buy (BBY) rose over 39, closed at 38.97, up 1.01.

Financials were strong, with JP Morgan (JPM) up 1.56 to 28.14 and Morgan Stanley (MS) up 96 cents to 23.73. There were fractional gains in Wells Fargo (WFC) and Bank of America (BAC).

Among the ETFs, the iShares MSCI Brazil Index ETF (EWZ) gained 1.54 to 39.24, and the Direxion Large Cap Bull 3X Shares (BGU) up 1.36 to 22.98.

On the downside, the Ultrashort ProShares Financial ETF (SKF) at 94.12 was down 4.04, and the Direxion Financial Bear 3x Shares (FAZ) at 19.49 fell 1.20. Direxion Large Cap Bear 3X Shares (BGZ) lost 3.88 to 59.36.

Starent (STAR), which we eliminated from our model portfolio earlier in the week, closed at 14.56, down 1.24.

Stepping back and reviewing the hourly chart patterns, despite a very negative early start and big gap down, the indices rallied back sharply closing at the high end of the range for the day in a very impressive showing by the bulls. We'll see if further overhead resistance at yesterday's high at 1258 NDX and lateral price resistance at 815 SPX can thwart the rally or if the rally is able to extend past that and break out to the upside.

Good trading!

Harry

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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.

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