Stock Market Indices Roll Over, Repelled by Resistance

By: Harry_Boxer

The stock market indices started out the day with firm action, backed off, held support, and then ran to the session highs early in the morning. By midday they retested again and again key overhead resistance at 1840 on the Nasdaq 100 and 1090 on the S&P 500, but couldn't get through and began a slow rollover in the afternoon. In the last 15 minutes that accelerated down into the session lows near key support, particularly on the S&P 500.

Net on the day, the Dow was down 126.82 at 10,066.57, just 14 points off its low. The S&P 500 closed at 1073.64, down 14.05 and about a point off its low, and Nasdaq was down 7.49 after being up much of the day, closing at 1815.28, about a point off its low as well, but 27 points off its high.

Advance-declines were negative by more than 3 to 2 on the New York Stock Exchange and by about 2 to 1 on Nasdaq. Up/down volume was about 3 1/2 to 1 negative on New York on total volume of 1.3 billion. Nasdaq traded just at 2 billion today and almost a 3 to 1 negative ratio.

Coinstar Inc. (CSTR) is a larger-cap, higher-priced stock that has been moving beautifully this year and has risen from the mid-20s to the mid-50s. Recently, this stock has pulled back and consolidated in a nice flag pattern. I expect a move that breaks this out of this range and into the low- to mid-60s, my short-term trading target.

Sprint Nextel Corp. (S) had a big day on a monster volume of 123 million shares. It gapped and ran, tested resistance resistance from the July '09 high at the 4.79 area and backed off. Several layers of resistance were taken out recently. I expect this stock to test the major highs of last year up around the 5 1/2-6 zone short-term.

Origin Agritech Limited (SEED) had a big day today, up 1.18 or 16 1/2%, on nearly 3 million shares traded. This stock is up against moving average and declining tops resistance. It'll be very interesting to see if it can get through the 9-9 1/4 area, which is key resistance at the 50-day moving average and lateral price resistance. My short-term trading target is 9 1/2. A break through that and I'm looking for a move up that takes it into the 11-12 zone.

TTI Team Telecom International Ltd. (TTIL), which we talked about over the weekend, had an inside quiet day today. It's consolidating in the 2.54 zone, and had very low volume today, only off 2 cents. Looks like this stock could make it up towards the 3 1/4 range, my short-term trading target, followed by something up around 4 1/2.

TheTechTrader.com board was quite mixed after the early morning run-up, but there were several stocks that had sharp gains. These included Apple Inc. (AAPL), up 4.44 at 246.76, 4.00 off its high, and Google Inc. (GOOG), up 5.11 to 477.16, 12 points off its earlier high.

Other point-plus gainers included Dendreon Corp. (DNDN) up 1.43 at 43.13. Delcath Systems Inc. (DCTH) had an excellent session, up 1.11 at 14.57. Acme Packet, Inc. (APKT) jumped 91 cents to 26.33. Origin Agritech Limited (SEED) had exceptional session, up 1.18 at 8.28, and VIVUS Inc. (VVUS) advanced 71 cents at 11.92.

The ultra-shorts did well today, obviously, with the late sell-off. The Direxion Daily Emrg Mkts Bear 3X Shares (EDZ) went from 54 to 57.20 and closed at 56.92, up 1.67. Direxion Daily Financial Bear 3X Shares (FAZ) closed up 1.17 at 16.34, just pennies off its high on big volume of 73.4 million shares. The ProShares UltraShort Real Estate (SRS) also closed up 1.17 at 30.35.

Stepping back and reviewing the hourly chart patterns, the indices rallied in the morning, tested and retested several times and probed key overhead resistance at 1840 NDX and 1090 SPX, but then sold off in the afternoon in an orderly fashion only to accelerate sharply lower in the last 15 minutes closing near the session lows.

So, it was very negative way to start the week, and the indices have formidable resistance to contend with.

Good trading!

Harry

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