Stock Market Key Overhead Resistance Gives Way in Bullish Session

Stock-Markets / US Stock Markets Jan 29, 2009 - 03:52 AM GMT

The indices had a fantastic bullish session as pre-market futures were sharply higher based on the government news about bank corporations that absorb bad debt. In any case, the indices opened sharply higher, backed and filled for the first 45 minutes or so, and then started a strong advance that lasted all morning into mid-afternoon, reaching as high as 1245 the Nasdaq 100, at that point up nearly 32 points. The S&P 500 spiked up near 878, up 31 points. They did have a sharp setback in the last 1 1/2 hours, but in the last 30 minutes took back most of those losses.

Net on the day the Dow closed up over 200 to 8375, the S&P 500 was up 28.38 at 874 and change, and the Nasdaq 100 was up 41.50 to nearly 1236. The Philadelphia Semiconductor Index (SOXX) advanced 5.31, about a 2 1/2 percent gain.

The technicals were outstanding. Advance-declines were about 6 1/2 to 1 positive on New York and 3 1/2 to 1 on Nasdaq. Up/down volume was story today, with more than 1 1/3 billion to the upside and only 166 million to the downside on New York, about a 7 to 1 positive ratio, on total volume of 1 1/2 billion. Nasdaq traded more than 2.1 billion with 1.9 billion to the upside and less than 240 million to the downside, about an 8 to 1 positive volume ratio.

TheTechTrader.com board was very strong. Most of the stocks were up on our board today, except for the short ETFs, which got hammered. The Direxion Financial Bear 3x Shares (FAZ) dropped 18.30 to 39.33. The Direxion Large Cap Bear 3X Shares (BGZ) dropped 6.53 to 59.82.

Sequenom (SQNM), which traded cautiously ahead of tonight's presentation and announcements, closed at 22.60, down 49 cents.

Other than that, it was a big day, particularly for the financials. Well Fargo (WFC) was up 5 to 21.19, MS up 3.48 to 23, JPM up 2.60 to 27.66, BAC up 89 cents to 7.39, and C up 66 cents to 4.21. Hartford Financial Services (HIG) also advanced 3.12 to 17.51.

Agricultural stocks were very strong as well, with Potash (POT) up 2.30 to 78.70, Mosaic (MOS) up 1.23 to 37.77, Agrium (AGU) up 1.98 to 35.49, and CF Holdings (CF) up 2.83 to 49.14.

Other stocks of note, Apple (AAPL) was up 3.47 to 94.20. The Direxion Financial Bull 3x Shares (FAS) had a spectacular day, closing at 12.34, up 3.04 on 86 1/2 million shares. That was our Chart of the Day yesterday. The Direxion Large Cap Bull 3X Shares (BGU) advanced 2.63 as well.

Energy Conversion Devices (ENER) gained 1.14 today, PLD 1.30 to 11.85. RIMM had an outstanding session, advancing 2.72 to 56.63.

Portfolio position Net 1 Ueps Technologies (UEPS) was up 61 cents, and DryShips (DRYS) gained 92 cents in a firm shipping sector.

Cree Inc. (CREE) gained 76 cents. The iShares MSCI Brazil Index ETF (EWZ) advanced 1.91, with the Ultra Oil & Gas ProShares (DIG) up 1.19 and the iShares FTSE/Xinhua China 25 Index (FXI) 95 cents.

Stepping back and reviewing the hourly chart patterns, key overhead resistance was taken out today at the 1200-05 zone on the Nasdaq100 and the 858-60 zone on the S&P 500. Further progress was made near secondary resistance up near the 1240-45 zone the Nasdaq 100, and near 880 on the S&P 500. Those are the levels we'll be watching tomorrow, Right now the indices have broken back out , and the overall patterns are looking more constructive than they had. We'll see if we get an upside follow-through tomorrow.

Good trading!

Harry

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