The indices had a down session, but came back off the late morning session lows to pare the declines by quite a bit. The day started out with a gap down. They stair-stepped lower, then bounced around mid-morning, stabilized, and then started to rally. It was a 9-wave advance from 11:30 to the close that took the indices back up to neew highs for the session in the late 5 mintues.

Net on the day the Dow was down 41.74 but closed about 113 points off its low. The S&P 500 was down 7.02, 13 points off its low, and the Nasdaq 100 was down 3.06 to 1313, 27 points off its low and right near the highs for the day. The Philadelphia Semiconductor Index (SOXX) was down 5.66, 5 points off its low.

The technicals were quite negative at the close. Advance-declines were 927 up and 2097 down on New York. Up/down volume was better than 2 to 1 negative on New York on total volume of just under 1.3 billion. Nasdaq had nearly 1900 down and 842 up on advance-declines, and traded more than 2 billion, with a more than 2 to 1 negative volume ratio.

TheTechTrader.com board was mixed, with small fractional gains. On the plus side, the handhelds did well. Research in Motion (RIMM) at 63.97 was up 4.68 on 49 million, and Apple (AAPL) closed at 118.45, up 2.46 on 23.3 million.

The UltraShort Real Estate ProShares (SRS) was up 1.07 to 39.17, the SKF ultrashort financial ETF up 3.35 to 84.30, the Direxion Financial Bear 3x Shares (FAZ) up 90 cents to 16 1/2, and the Direxion Large Cap Bear 3X Shares (BGZ) up 1.33 to 63.64.

Large losses on the downside included Potash (POT) in the weak agricultural/chemical sector down 2.23 to 83.48, Mosaic (MOS) down 75 cents to 44.89, and Agrium (AGU) down 93 cents to 38.28. Former portfolio position DG FastChannel (DGIT) lost 97 cents to 18.38, Best Buy (BBY) lost 1.24 to 39.02, and JP Morgan (JPM) fell 1.08 in the generally weak financial sector. In addition, Morgan Stanley (MS) gave back 75 cents to 23.31, and Wells Fargo (WFC) lost 1.09 to 15.25.

Stepping back and reviewing the hourly chart patterns, the indices gapped lower, came down to test support on several occasions, held, and then snapped back when the Nasdaq 100 support held. Although the SPX did take out Friday's lows by a few points, they did manage to both snap back and close near the highs for the day but still down on the session. We'll see how it goes tomorrow, but the indices did well by holding support and not breaking down today, so we'll see if they can consolidate and continue higher, or rollover over and take out key support lows.

Good trading!

Harry

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