The markets were rather volatile on Monday. They had three major swings on the NDX and two moves on the SPX, but the bottom line was they moved sharply lower in the afternoon to close near the lows for the day going away in negative territory after being up most of the morning.

The day started out with a spike to the upside, they pulled back sharply on the NDX to successfully test key short term support near 1150, while the SPX held up much better. When that occurred they surged back in a 3 wave rally, taking the SPX to new rally highs just under 775, near an important pivot point at 777. Then they rolled over in the afternoon, came down hard, completing a 2 1/2 day head and shoulders top on the Nasdaq 100, breaking the neckline at 1150 , closing at 1146, near the session low. The S&P 500 sold off steadily and closed at the lows for the day going away.

Net on the day the Dow was down 7.01 to 7216, which was 176 points off its high. The S&P 500 fell 2.66 to 753.89, 21 points off its high and the Nasdaq 100 fell 23.07 to 1145.45, closing 32 points off its high. The Philadelphia Semiconductor Index (SOXX) fell 7.95 to 212, nearly a 4 percent loss, 10 points off its high.

So big reversals in the afternoon, as we expected we'd see.

The technicals managed to stay positive on New York but were quite negative on Nasdaq. Advance-declines were positive by 440 issues on New York, but negative by 320 issues on Nasdaq. Up/down volume was 5 to 4 positive on New York on total volume of almost 1.9 billion. Nasdaq traded 2.1 billion and had a nearly 3 to 1 negative volume ratio, as Nasdaq and the NDX trailed for most of the day.

Most of the issues we follow on TheTechTrader.com board fell into negative territory, although there were several point-plus gainers as well as losers.

The SRS ultrashort real estate ETF was up 9.91 to 72.22, 12 points off its low. Direxion Financial Bear 3x Shares (FAZ) was up 2.43 to 42.63, $8 off its low, and the Direxion Large Cap Bear 3X Shares (BGZ) up 1.10 on the day, $6 off its low.

The U.S. Oil Fund ETF (USO) was up 62 cents today at 28.25, on firm crude oil prices. Among other gainers, Aluminum Corp. of China (ACH) was up 97 cents and Agrium (AGU) 88 cents. Portfolio position Canadian Solar (CSIQ) added 16 cents, General Electric (GE) 4 cents, and Bank of America (BAC) up 42 cents. along with Sequenom (SQNM) up 15 cents to 14.01.

On the downside, Amazon (AMZN) lost 1.65 to 66.98. Morgan Stanley (MS) was weak all session, closing at 23.04 down 2.39, not far off the session lows. SunPower (SPWR) fell 1.07 to 23.31.

Financials in general were weak, after having been very strong in the morning, reversed sharply in the afternoon and came down hard.

Direxion Financial Bull 3x Shares (FAS) , as a result, dropped from 5.90 to 4.87, closing down 28 cents, just a few cents off its low.

Stepping back and reviewing the hourly chart patterns the indices completed their 4-1/2 day run with an afternoon slide that put them back into negative territory. Another negative Monday to start the week.

Good Trading!

Harry

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