The stock market indices finally rolled over and had a negative session, but the day started out with a very strong surge to the upside. They went to new rally highs on both indices, which fell short of the early May rally highs. With the retest of the highs falling short, they rolled over in a strong 3-wave decline and got not far off the lows for the day. Only a last 10-minute slight bounce brought them off the exact lows for the session.

Net on the day the Dow was down 52.81 to 8422 and change, the S&P 500 down 4.66 to 903.47, and the Nasdaq 100 down 4.33 to 1393.78. The Philadelphia Semiconductor Index (SOXX), however, was up 0.66 to 256.99.

The technicals were mixed, only slightly positive on advance-declines on New York by just 106 issues, and slightly negative on Nasdaq by 191 more decliners. Up/down volume was just slightly negative on New York on total volume of more than 1.6 billion. Nasdaq traded 2.3 billion, but had a 7 to 4 negative volume ratio.

TheTechTrader.com board was mostly narrowly mixed. On the plus side, oil was up again today, and the U.S. Oil Fund ETF (USO) gained another 1.08 to 33.87. The UltraShort Financial ProShares (SKF) added 1.83 to 45.30, and the Direxion Financial Bear 3x Shares (FAZ) was up 34 cents to 5.41. The Direxion Small Cap 3x Bear (TZA) advanced 78 cents to 27.45, and the Shares MSCI Brazil Index ETF (EWZ) rose 40 cents to 51.98.
Portfolio position PowerShares DB Double Long Oil (DXO) was up 21 cents to 3.75, a new multi-month high.

On the downside, the financials led the way, with Goldman Sachs (GS) down 4.71 to 136.44, JP Morgan (JPM) down 1.26 at 34.55, Morgan Stanley (MS) 91 cents to 28.00, and Wells Fargo (WFC) 99 cents to 24.46. Bank of America (BAC), however, was up 24 cents to 11.49.

Other stocks of note, American Italian Pasta (AIPC) dropped 1.90 to 23.59, continuing its recent losing ways, and Apple (AAPL) lost 1.58 to 25.87.

Stepping back and reviewing the hourly chart patterns, the market had a strong surge in the morning, then a 3-wave decline that brought them near the lows for the day, ending the day down and breaking key short-term support in the last 1-1 1/2 hours. We’ll see if that’s significant and whether or not the head and shoulders-looking tops of the last two days are significant. We’ll be watching support carefully tomorrow in the 1380-85 zone on the Nasdaq 100 and the 896-98 on the SPX.

Good trading!

Harry

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