Stock Market Indices Consolidate as Prelude to Upside Breakout

By: Harry_Boxer

The markets had three distinct parts of the session. They were up in the morning, down mid-day and back up late in the session to close with gains for the day. Modest gains, but gains nevertheless.

The day started out with a move down that held support, then moved back up and took out minor resistance, although there was no follow-through. That's when the sell-off resulted, taking the indices all the way to new lows for the day and yesterday's lows, and in fact to the last 3-day support lows. But that held with about an hour and a half to go when the market started a choppy move back up and closed in the top third of the range for the day.

Net on the day the Dow was up 70, the S&P 500 up 10 1/2, and the Nasdaq 100 nearly 10 as well. The Philadelphia Semiconductor Index (SOXX) was up nearly 3.

The technicals were very positive today. Advance-declines were positive by about 21 to 9 1/2 on New York and by about 2 to 1 on Nasdaq. Up/down volume was nearly 3 to 1 positive on New York on a bit lighter total volume of 1.3 billion. Nasdaq traded about 2 billion and had a little less than 2 to 1 positive volume ratio.

TheTechTrader.com board was mixed but mostly higher. Leading the way were the agriculture stocks, with Potash (POT) up 7.63, AGU 3.10, MOS 2.38, and CF 1.64.

The shippers continued their strong snapback, with DRYS jumping another 1.26 to 10.71, reaching as high as 12.10 today, nearly quadruple from its low of 2 weeks ago. Today's volume was 59 million shares.

EXM in that group had a strong session early on. That was our Chart of the Day, jumping from 7.15 to 9.17, more than 2 points, but pulling back to 7.65 at the close, still up 51 cents on over 10 million shares.

Portfolio position SPWR at 31.01 was up 1.17. Portfolio position EBS at 25.11 was up 1.34, reaching 25.44, near a new all-time high. CSIQ managed to jump back 59 cents today on 1 1/4 million shares, and AVAV was up 1.28 to 34.78. ACH gained 1.31 to 14.86.

There were positive results for most of the ETFs today. Among our portfolio positions, DIG gained 2.68, FXI 2.16, BGU 1.10 and the USO up 1.36.

Stepping back and reviewing the hourly chart patterns, as we anticipated the indices had mostly a consolidation day but managed to eke out some positive results with a late rally in the session. Support has held now for 3 days and it augurs well for future price progress with an expected consolidation break to the upside and another strong leg up.

Good trading!

Harry

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