Stock Market Plunge as Bad as It Gets

By: Harry_Boxer

The indices suffered a very negative session to start the week. The indices gapped down below short-term support, and experienced a narrow but volatile session, particularly late in the afternoon. Net-net it closed at the lows for the day going away on the S&P 500 and very close to it on the Dow. Only the Nasdaq 100 managed to close above the lows, but still suffered a very steep loss.

The day started out with a steep drop and then had a sharp rebound that failed at resistance, a retest that was successful, an afternoon rally that retested the highs, and finally a late drop that crushed the market to the lows on the blue chips.

Net on the day the Dow was down 297.81 to 7552.60. The S&P 500 closed at 789.17, down 37.67, and the Nasdaq 100 at 1187.04 was down 49.81. The Philadelphia Semiconductor Index (SOXX) was down 14.68, more than 7 percent, at 205.87. Advance-declines were negative by an astonishing ratio of 29 to 2 on New York and 23 1/2 to 4 on Nasdaq. Up/down volume was more than 20 to 1 negative on New York, with less than 70 million up and 1 1/2 billion down. Nasdaq was about 4 to 1 negative, with 1.86 billion to the downside and 482 million to the upside.

TheTechTrader.com board as a result was extremely negative, with multiple-point losers across the board. Leading the way was agricultural stock Potash (POT), down 7.94 to 78.12. In that group Agrium (AGU) dropped 3.30 and Mosaic (MOS) 3.34, and CF Holdings (CF) 3.36.

Among other large losses, Apple (AAPL) lost 4.63, Energy Conversion Devices (ENER) 2.92, Hartford Financial Services (HIG) 2.48 (to 9.98), JP Morgan (JPM) 3.04, Morgan Stanley (MS) 3.17, Research in Motion (RIMM) 3.87, SunPower (SPWR) 2.89, and Wells Fargo (WFC) 2.07.

Among the ETFs, the Ultra Oil & Gas ProShares (DIG) dropped 3.33, and Direxion Large Cap Bull 3X Shares (BGU) 3.74. The Direxion Financial Bull 3x Shares (FAS) lost 1.93 to close at 6.

On the plus side, the ultrashort ETFs did extremely well today. Direxion Financial Bear 3x Shares (FAZ) up 12.10 to 61.38, the Direxion Large Cap Bear 3X Shares (BGZ) 8.89 to 76.39, and the UltraShort Real Estate ProShares (SRS) up 9.01 to 77.77. That was our Chart of the Day.

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Stepping back and reviewing the hourly chart patterns, the indices gapped lower, dropped sharply and then backed and filled all day with a very negative close. The indices are looking ominous for more downside over the next day or two.

I'd have to call today an extremely negative session to start the week, and it does not augur well for the market over the near term.

Good trading!

Harry

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