It was a blue Monday to start off the week, yet another negative Monday in an ongoing bear market after a 2 1/2-week rally. They gave it all back with a sharp gap down at the opening, made lower lows for the next hour or two, but bounced and held 1205, which is key 6-day support on the NDX. The NDX made lower lows but was not confirmed by the SPX, and late in the day they had a snapback, short-covering type rally.

Net on the day the Dow was down 254.16 to 7522, the S&P 500 28.41 to 787.53, and the Nasdaq 100 down 30.66 to 1220.88. The Philadelphia Semiconductor Index (SOXX) lost 10.52 to 229.45.

The technicals were horrendous. Advance-declines were about 9 to 1 negative on New York and about 3 to 1 negative on Nasdaq. Up/down volume was about 20 to 1 negative on New York on total volume of about 1 1/2 billion. Nasdaq traded just over 2 billion and had about a 6 to 1 negative volume ratio.

TheTechTrader.com board was nearly all lower, with several large multiple-point losers. Agriculture stocks got hammered with Potash (POT) at 81.79 down 6.92, Mosaic (MOS) at 42.74 down 4.31, and Agrium (AGU) at 35.65 down 2.69.

Financials were very weak. Wells Fargo (WFC) at 13.37 lost 2.22, JP Morgan (JPM) at 24.85 fell 2.55, Morgan Stanley (MS) at 22.13 was down 2.22, Bank of America (BAC) at 6.03 gave back 1.31, and Hartford Financial Services (HIG) at 7.71 was down 1.07.

Energy Conversion Devices (ENER) got hammered for another 2.34 to 13.43, as another negative article appeared in Barron's.

Solar stocks also were weak, with SunPower (SPWR) down 1.48 to 8.23, and Canadian Solar (CSIQ) down 48 cents to 5.28.

Shippers were weak as well, with DryShips (DRYS) down 91 cents to 4.95 and Excel Maritime (EXM) down 86 cents to 4.45.

General Electric (GE) fell 85 cents to 9.93, and Sequenom (SQNM) lost 1.04 to 14.45.

Central European Media (CETV) got hammered for 1.60 at 11.25, and Cree Inc. (CREE) was down 1.06 to 22.03. Best Buy (BBY) was down 1.07 at 36.97, and American Italian Pasta (AIPC) lost 1.73 to 33.42.

Apple (AAPL) lost 2.36 to 104.49, and Aluminum Corp. of China (ACH) at 14.61 was down 2.10.

The U.S. Oil Fund ETF (USO) gave back 2.05 to 28.70, and the Direxion Financial Bull 3x Shares (FAS) 1.49 to 4.85.

The iShares MSCI Brazil Index ETF (EWZ) lost 1.98 to 37.22. The Direxion Large Cap Bull 3X Shares (BGU) dropped 2.42 to 22.11, and the Ultra Oil & Gas ProShares (DIG) fell 1.70 to 21.84.

On the plus side, the UltraShort Real Estate ProShares (SRS) at 61.01 was up 6.35. The Direxion Financial Bear 3x Shares (FAZ) at 24.64 up 4.69, and the Direxion Large Cap Bear 3X Shares (BGZ) up 5.92 to 64.71.

In addition, the Ultrashort Financials ETF (SKF) exploded for 15 points today, closing at 110.03, up 15.04.

Stepping back and reviewing the hourly chart patterns, the indices gapped down, went lower in the morning, bounced around mid-day on the NDX, made lower lows on the SPX, and then a late rally brought them off the lows, but not enough to prevent a very big loss today, with the Dow losing more than 3 percent. So we'll see what this means to the trend, but it certainly looks like the back of the 2 1/2 -week uptrend has been broken, with trendlines and moving averages being penetrated decisively.

Good trading!

Harry

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