Stock Market Very Negative Start to the Week

By: Harry_Boxer

The stock market indices started the week on a down note, although in the beginning of the session they did try an early rally that failed right at resistance. They rolled over to new pullback lows on the Nasdaq 100, and made slight new lows on the S&P 500. They tried to work their way back up, but failed at the declining topslines, rolled over in the afternoon, bounced with about an hour to go, and then got slam-dunked into the close.

Net on the day, the Dow was down 115.48 at 9816.49, the S&P 500 down 14.41 at 1050.47, and the Nasdaq 100 down 33.88 at 1798.16, all close to their session lows.

Advance-declines were a little less than 3 to1 negative on the New York Stock Exchange and 5 to 1 negative on Nasdaq. Up/down volume was nearly 3 to 2 positive on New York, but almost 17 to 1 negative on Nasdaq.

Our Charts of the Day:
Tonight we update some of the Boxer Shorts we talked about over the weekend for our subscribers.

Aixtron Aktiengesellschaft (AIXG), which has quadruple tops up in the 38 area, came down hard, bounced, made a lower low, bounced to resistance, and is starting to fall away here. It looks like it could get down into the high teens at some point, but there is some support around 20. Today this stock was down 1.24 at 23.64.

Direxion Daily Financial Bear 3X Shares (FAZ) was up 84 cents, or 5%, today on 67.6 million shares traded. It followed through Friday's little pop. Like most of the ultra-short ETF, this stock formed a mini down-channel flag pattern consolidation, and has 4 waves down and is in a 5th wave up that could take this one up towards the 20 1/2 - 21 zone, my trading target.

Goldman Sachs (GS) broke an important bear flag today. There's a flag here. It was down 3.57, and appears to be headed down toward the high 120s. That's my trading target if it gets below 133.

IPath S&P 500 VIX Short-Term Futures ETN (VXX), which looks like one of the best ETFs out there right now on the short side, has had 4 waves with a 5th wave just starting. It looks like a move up to 40 - 41, my trading target. This target could be had in the next few days, particularly if we get a sharp drop in the indices, which appears to be imminent, but we'll see what kind of downside follow-through we get in the next few days.

Reviewing our Watchboard:

TheTechTrader.com board was nearly all negative, except for ultra-shorts ETFs, which were the only stocks up on our board today. The Direxion Daily Emrg Mkts Bear 3X Shares (EDZ) was up 2.51 at 55.76, the iPath S&P 500 VIX Short-Term Futures ETN (VXX) up 98 cents at 32.27, the Direxion Daily Financial Bear 3X Shares (FAZ) mentioned above, the Direxion Daily Large Cap Bear 3X Shares (BGZ) up 65 cents at 17.54, and the Direxion Daily Small Cap Bear 3X Shares (TZA) up 59 cents at 8.13.

On the downside, Dendreon Corp. (DNDN) lost 4.14 to 36.70. Delcath Systems Inc. (DCTH) got hammered for 3.82 down to 10.83. Coinstar Inc. (CSTR) gave back 3.40 to 51.01, Las Vegas Sands Corp. (LVS) 1.53 at 22.72, RINO International Corporation (RINO) 1.34 at 11.18, and Xyratex Ltd. (XRTX) 1.06 at 14.41.

Apple Inc. (AAPL) introduced a new iPhone, but nevertheless dropped 5.02 to 250.95. Google Inc. (GOOG) got hammered for 13.20 to 485.52, and Goldman Sachs (GS) fell 3.57 to 138.68. All in all it was quite a negative session for the indices.

Stepping back and reviewing the hourly chart patterns, the indices were up early but then had a strong 3-wave decline and ended near the session lows, with the NDX closing under 1800 and the SPX closing right near 1050. A very negative start for the week. Certainly there's potential for more rollover coming, as even though the indices are quite oversold here, the downside momentum has not been abated and may continue.

Good trading!

Harry

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