The markets were doing fantastic until the last 45 minutes when a sudden plunge dropped them sharply, and dropped the Dow, S&P 500 and OEX to losses on the day.

Because of that big move up in the Philadelphia Semiconductor Index (SOXX), up more than 10 points, the NDX ended in the plus column, but closed about 27 points off its high.

The day started out with a move down but they quickly reversed and rallied sharply, as the mid-morning snapback resulted in higher levels, with NDX reaching 1360 and the SPX reaching 850. By mid-day they were consolidating, pulling back and retesting, but several probes of support held and they rallied to nominal new session highs, and, in the NDX's case, to new 6-week rally highs. However, that late reversal was a very sharp one, triggered perhaps by rumors about the stress test indicating the banks were much weaker than expected.

Net on the day the Dow was down 82.99 and the S&P 500 down 6 1/2, but the Nasdaq 100 was up 6.66. The Philadelphia Semiconductor Index (SOXX) was up 10.42.

Advance-declines narrowed dramatically at the close. They still ended slightly higher, by about 8 to 7 on New York and only by 130 issues on Nasdaq. Up/down volume was lower by 4 to 3 on New York on total volume of 1 3/4 billion. Nasdaq traded more than 2.6 billion and had a 3 to 2 positive volume ratio.
As a result of all the gyrations, TheTechTrader.com board was mixed, but with several point-plus gainers. In particular, portfolio position DG FastChannel (DGIT) soared to new 6 1/2-month highs, closing up 1.46 to 22.43 on 864,000 shares, the heaviest volume in nearly a year.

Solar stocks were very firm today, with Energy Conversion Devices (ENER) +1.74 to 16.39, SunPower (SPWR) +2.00 to 27.30, and SOLR +0.36 to 6.82. Canadian Solar (CSIQ) added 29 cents to 6.00.

Among other point-plus gainers, the UltraShort Financial ProShares (SKF) rallied 7 points off its low to close up 3.73 to 64.03. The UltraShort Real Estate ProShares (SRS), jumped 3 points off its low, closing right near its high, up 1.80 to 29.05. The FXP gained 1.29 to 21.34. The Direxion Financial Bear 3x Shares (FAZ) rallied sharply in the last hour, up 0.76 to 9.91.

On the downside, Aluminum Corp. of China (ACH) lost 1.24 to 18.41, Morgan Stanley -2.21 to 22.44, JP Morgan (JPM) -0.63 to 31.90, and Wells Fargo (WFC) -0.63 to 18.18 on nearly a quarter billion traded. The iShares FTSE/Xinhua China 25 Index (FXI) lost 1.09 to 31.14.

Stepping back and reviewing the hourly chart patterns, the indices were up in the morning, consolidated mid-day, retested, rallied by mid-afternoon sharply, rolled over hard to close down on the day on the Dow and S&P. That close does not augur well for the bulls, and with head and shoulders patterns forming, it's conceivable that if we get any downside follow-through we may see some additional weakness over the next few sessions.

Good trading!

Harry

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