Stock Market Hit by Afternoon Sell-Off!

By: Harry_Boxer

The markets had a solid morning and reached the 4-day declining tops lines by late morning, stalled there and consolidated bullishly. But, after 3 or 4 failed attempts at breaking out they rolled over, broke short-term support, and then took out important secondary support and had a very sharp sell-off late in the day. The market bounced around in the last half hour, but for the most part closed near the lows for the day.

Net on the day the Dow was down 196 at 8565, 250 points off its high. The S&P 500 dropped 25.65 to 873.59. It was up to nearly 905 earlier in the day. The Nasdaq 100 dropped from 1229 down to 1176, closing at 1180.46, down 41 on the day. The Philadelphia Semiconductor Index (SOXX) was down 5.20 to 203.37. That was 8 points off its high.

So, complete reversals in the afternoon, as the indices especially gave it up after breaking KEY 4 day support.

The technicals were quite negative by 24 to 7 on declines over advances on New York and 21 to 7 on Nasdaq. Up/down volume was about 6 to 1 negative on New York on total volume of under 1.5 billion. Nasdaq traded a shade under 2 billion and had a 7 to 1 negative volume ratio.

As a result of the negative afternoon, TheTechTrader.com board finished mostly negative, other than the short ETF instruments and the USO. The US Oil Trust ETF (USO) was up 2.83 to 38.64, about a dollar off its high, but still a solid day on 30 million shares as crude oil jumped more than $4 a barrel.

The BGZ closed up 5.10 at 67.4 and the QID up 3.67 to 70.93.

Elsewhere in the oil sector, the DIG got up to 32.50, but sold off late in the session, closing down 80 cents on the day. But the low-priced PowerShares DB Crude Oil Dble Long ETN (DXO) was up 46 cents to 3.27 on 22 1/2 million shares.

CSIQ did manage to jump earlier in the day, up as much as 95 cents to 6 1/4, but gave back a big chunk, closing up just 20 cents at 5.52.

Leading the way on the downside today were the agriculture stocks. POT fell 4.22, MOS 3.48, CF 3.66 and AGU 1.18.

AFAM lost 2.70, AAPL 3.21 to 95. DRYS was down 1.83, and EXM lost 1.25 on profit-taking in the shippers today.

Airlines were weak, with UAUA down 93 cents, DAL 1.03 and CAL down 1.28.

Stepping back and reviewing the hourly chart patterns, the indices had an important downside break, taking out 1200 on the Nasdaq 100 and 885 on the S&P 500, which was 4 day support. A bit disappointing, but they're still above their rising bottoms lines and within the confines of their rising channels over the last few weeks, and we'll see they can stem the tide in these areas near the bottom of the 4-day down-channels.

Good trading!

Harry

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