Stock Market Indices Stair-Step Lower & Close Near Key Support

By: Harry_Boxer

The stock market indices opened strong today and reached the session highs in the first 20 minutes, and from there it was downhill the rest of the day as the S&P 500 stair-stepped lower in a neat, orderly channel to retest yesterday's lows. At that point they bounced a couple times, but couldn't make any progress.

Net on the day, the Dow closed down 114.88 at 10,510.95, the S&P 500 down 16.14 at 1120.89, and Nasdaq 100 down 28.39 at 1887.06.

Advance-declines were better than 3 to 1 negative on both the New York Stock Exchange and on Nasdaq. Up/down volume was about 8 to 1 negative on New York and about 6 1/2 to 1 negative on Nasdaq. Total volume on New York was about 1 1/2 billion and about 2 1/3 billion on Nasdaq.

Our Charts of the Day:

Delcath Systems Inc. (DCTH), which has been on our Fab 40 list and doing well of late, was up another 46 cents, or 3.13%, today on increasing volume. After the spike up in April and reaching up to nearly 16 1/2, it rolled over, bounced and now has moved back up to challenge those highs again. The top of the channel measures somewhere up in the low 20's, my intermediate target. Short-term target, if it does get past 16 1/2, is up around 19-20.

L&L Energy Inc. (LLEN) came out with fantastic earnings and projections today, closing up 42 cents. It jumped over $1 at one point, but backed off when reaching its 21-day moving average and declining topsline. However, the wedge pattern that it's forming should result in an upside breakout and move across 11 and a run up toward my initial trading target at 12 1/2.

Power-One Inc. (PWER) is coiling, narrowing at the apex of a wedge pattern in a beautiful rising long-term channel. Short-term target is up around the 9 area near the spike high, secondary target at 10 1/2.

Moving over to some Boxer Shorts, Aixtron Aktiengesellschaft (AIXG), which was a favorite of ours for a couple of years, has formed a massive 1-year top. It came down hard and bounced, failed at the moving averages, and rolled over, down 1.88 today. It looks lower. A takeout of the 27-28 area, my next trading target, could lead to something in the mid-20's.

Reviewing our watchboard:

TheTechTrader.com board was mostly lower, except for the ultra-short ETFs, which had a stellar day. Leading the way was the iPath S&P 500 VIX Short-Term Futures ETN (VXX), up 1.65 to 29.13. The Direxion Daily Emrg Mkts Bear 3X Shares ETF (EDZ) was up 3.05 to 51.90, ProShares UltraShort Real Estate (SRS) up 1.34 to 27.94, and the Direxion Daily Financial Bear 3X Shares (FAZ) up 1.22 to 14.99. Those were the only point-plus gainers on our board.

Other stocks of note, Vivus (VVUS) has a strong session, up 73 cents on 17 million shares and closed at 13.20. L&L Energy Inc. (LLEN), as noted above, on strong earnings projections was up 42 cents to 10.15. Delcath Systems Inc. (DCTH) was up 46 cents to 15.15, and Spreadtrum Communications Inc. (SPRD) jumped 1.28 to 9.46, a strong percentage gain.

On the downside, point-plus losers, which were many, included Google Inc. (GOOG), which dropped 9.60 to 498.37. Goldman Sachs lost 5.28 to 137.36, Amazon Inc. 2.63 to 126.28, and Apple Inc. (AAPL) 1.86 to 252.36.

In addition, Baidu Inc. (BIDU) gave back 1.61 to 71.57, American International Group Inc. (AIG) 1.22 to 37.78, China Agritech Inc. (CAGC) in a weak Chinese sector 1.70 to 13.85, and China Automotive Systems Inc. (CAAS) 47 cents to 18.85.

Houston American Energy Corp. (HUSA) in a soft oil group was down 1.21 to 10.13, and Mindspeed Technologies Inc. (MSPD) dropped 66 cents to 8.89.

Stepping back and reviewing the hourly chart patterns, the indices gapped up and reached their session highs early in the day, then stair-stepped their way lower all session, closing near the session lows and near key support. We'll have to see whether tomorrow we get any downside follow-through or are able to hold support in this area and snap back.

Good trading!

Harry

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