Stock Market Indices Snapback in Significant Turnaround Session

Stock-Markets / US Stock Markets Jan 22, 2009 - 05:15 AM GMT

The markets had a strong opening, a tough and steep retest that held, and then some mid-day back and forth vacillations, at which point the direction looked in doubt. Two or three mid-day tests of support held, and then they started a very strong rally that started feeding on itself spurred by apparent short covering, and in the last hour in particular spiked up right into the close with sharp gains.

Net on the day the Dow was up 279, the S&P 500 up 35, and the Nasdaq 100 up 49. The Philadelphia Semiconductor Index (SOXX) gained 3 percent, up 6.11.

Advance-declines were 4 to 1 positive on New York and 2 1/2 to 1 positive on Nasdaq. Up/down volume was the big story, more than 1 1/2 billion to the upside and only 185 million to the downside on New York, about an 8 to 1 positive ratio. Nasdaq traded more than 2 billion and had about a 7 1/2 to 1 positive volume ratio.

TheTechTrader.com board had an exceptional day today, with many of our stocks and portfolio positions doing exceptionally well today.

Leading the way to the upside was Apple (AAPL), which gained 4.63 today to 82.83. With the rise in oil, the Ultra Oil & Gas ProShares (DIG) was up 3.25, and the U.S. Oil Fund ETF (USO), a portfolio holding, gained 2.37, closing at 31.03.

Another portfolio position, Direxion Large Cap Bull 3X Shares (BGU), jumped 3.14 to 29.09.

Financials also had an excellent session today. Leading the market rally, JP Morgan (JPM) advanced 4.54 to 22.63. Bank of America (BAC) snapped back sharply, up 1.68, on 436 million shares, closing at 6.68. MS had an exceptional session at 16.86, up 3.76 on 46 million, and portfolio position Wells Fargo (WFC) at 16.65 was up 2.42 on 188 million. Citigroup (C) jumped 87 cents as well, up 3.67 on 311 million.

Other stocks of note, Hartford Financial Services (HIG) advanced 1.98 to 13.49. RIMM jumped 2.98 to 52.91. Favorite portfolio holding Sequenom (SQNM) had an exceptional session, snapping back late and strong, up 1.50 to 25.54 on nearly 2 million traded.

Portfolio position Net 1 Ueps Technologies (UEPS) closed at 12.01, up 73 cents.

On the downside, the ultrashort ETFs got slaughtered today. FAZ reaching as high as 85.85 earlier in the session closed at 57.20, down 30.95 on 16 million shares. The Direxion Large Cap Bear 3X Shares (BGZ) at 68.01 was down 9.87 on 7 2/3 million.

Other than that, airlines were generally quite weak ,United (UAUA) fell 71 cents, and Continental (CAL) got hammered for 2.16 on the rise in oil.

Stepping back and reviewing the hourly chart patterns, it was a possibly significant session today after yesterday's blow-out, as the indices rose early, pulled back hard to retest but held, and then rallied and came on strongly, particularly in the last couple hours, to close at the highs for the day going away.

It was a big session, which took out several layers of minor support and closed above the declining moving averages on our hourly charts, with the indices pressing the 7-day declining tops lines, which we expect could be broken tomorrow. If that occurs we may have seen a significant short-term low here. We'll see how it goes tomorrow.

Good trading!

Harry

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