Stock Market Manages to Hold Gains After Strong Opening Gap

Stock-Markets / US Stock Markets Jul 30, 2009 - 07:55 PM GMT

We had another up-day, and the indices started with a big rally that broke key multiple session consolidation ranges and went to new 3-week & 2009 rally highs.

The rally in the morning took the Nasdaq 100 to a new rally high at nearly 1633, the highest level reached since early November of last year. The S&P 500 reached 996.68, the highest level since late September of last year. They pulled back late in the morning and then consolidated mid-day, but when no rally materialized late in the session they rolled over hard and took back a big chunk of the gains.

Net on the day the Dow was up 86.74 to 9154.46, but traded nearly 90 points higher earlier in the day. The S&P 500 was up 11.60 to 986.75, about 10 points off the high, and the Nasdaq 100 closed up 10.26 at 1601.97, but gave back 22 points off its high.

Advance-declines were positive by 4 to 1 on New York and 2 12 to 1 on Nasdaq. Up/down volume was 2 1/2 to 1 positive on New York on total volume of nearly 1.35 billion. Nasdaq traded nearly 2 ½ billion and had a 16 t o 9 positive volume ratio.

So the technicals confirmed the positive session, but the last-hour sell-off put a big dent in the day's final results.

TheTechTrader.com board was very active and had many multiple-point gainers. Leading the way was American Superconductor (AMSC), jumping 5.85 to 32.13 on strong earnings, but that was more than 4 points off its high.

Goldman Sachs (GS) was up nearly 3 at 162.42 in a continuing strong financial sector. Morgan Stanley (MS) gained 1.20, at 28.36, and Wells Fargo (WFC) 49 cents to 24.87. JP Morgan (JPM) added 70 cents to 38.47.

In addition, Mosaic (MOS) advanced 2.48 to 51.71, and Potash (POT) 2.79 to 94.87 in the ag/chem sector.

Among the ETFs, the Direxion Financial Bull 3x Shares (FAS) rose 3.57 to 56.56, the U.S. Oil Fund ETF (USO) up 2.02 to 35.49 on firmer oil, the iShares MSCI Brazil Index ETF (EWZ) up 1.58 to 57.50, and the iShares FTSE/Xinhua China 25 Index (FXI) up 74 cents to 42.00.

Other stocks of note, Rambus (RMBS) jumped 93 cents to 17.13 on 3.3 million. New portfolio position Orthovita (VITA) closed at 6, up 50 cents on 1.5 million. Portfolio position Ixia (XXIA) gained 26 cents to 7.70, SIGA Technologies (SIGA) gained 14 cents to 7.91 and China Green Agriculture (CGA) jumped to as high as 12 today, where we exited, but closed at 11.12, up 39 cents on the day.

On the downside, the Direxion Financial Bear 3x Shares (FAZ) fell 2.58 to 34.98., the UltraShort Real Estate ProShares (SRS) lost 1.14 to 15.36, and the Direxion Small Cap 3x Bear (TZA) 89 cents to 16.37.
In the junior biotech sector, Targacept (TRGT) gave back 1.14 to 10.79.

Stepping back and reviewing the hourly chart patterns, a multiple-session consolidation range was broken at the upside at the opening with some large gap-ups. Then a strong rallied followed, only to take back a big chunk of it in the last hour, but still managing to hold gains on the session.

We'll see if today's afternoon reversal was meaningful or not. But it certainly was another positive session for the bulls.

Good trading!

Harry

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