Stock Market Mixed, Narrow Close ... Well Off Lows!

By: Harry_Boxer

The stock market indices started out on a very negative note today, moving down sharply at the opening, the S&P 500 dropping from 1277 down to 1265, and the Nasdaq 100 dropped quickly, but it recovered quickly. The S&P 500 also recovered, but not as quickly. However, later when the NDX broke out the SPX started to thrust. We had a strong rally from early morning to just after lunch hour, taking the NDX from 2317 to 2352. The S&P 500 jumped from 1255 to 1283. At that point they were overbought, and we indicated that we thought the market would pull back, which it did, but in an orderly fashion, holding support, which caused a late snapback into the close. The indices ended up positive on the SPX and the NDX, but not quite on the Dow, although the Dow clawed its way back about 130 points.

Net on the day, the Dow closed down just 2.72 at 12,413.70, managing to hold 12,400. The S&P 500 was up 3.76 to 1281.06, or 16 points off the low, and the Nasdaq 100 up 19.27 at 2348.98, and only 3 points off its high and 31 points off its low.

Technicals, which were negative most of the morning, came solidly into the positive column.

Advance-declines were more than 3 to 2 positive on the New York Stock Exchange, and 3 to 2 positive on Nasdaq as well. Up/down volume was 4 to 3 positive on New York, with total volume of 825 million shares traded today. Nasdaq traded about 1.82 billion shares and had a 3 to 1 positive volume ratio.

So, there was stronger volume on Nasdaq today.

Charts of the Day:

Reviewing our Watchboard:

TheTechTrader.com board, as a result, was mostly higher. Leading the way, Apple Inc. (AAPL) was up 4.59 to 418.30, and not that far from its all-time high.

Other stocks of note included Universal Display Corp. (PANL), which snapped back 2.24 to 34.72, and SodaStream International Ltd. (SODA) up 1.79 to 39.54, reaching as high as 41.88 today on a deal with Kraft.

In addition, Dendreon Corp. (DNDN) was a standout in the leading percentage gain today, up 3.02 to 10.62, or nearly 40%, on 45 million shares traded, on positive drug news from the government. Ancestry.com, Inc. (ACOM), on a strong earnings report, jumped 4.60 to 27.47, or 20%. We traded both of those today.

Low-priced Dex One Corporation (DEXO), a swing trade of ours, was up 40 cents to 2.32, or 21%; Zumiez, Inc. (ZUMZ), which we traded today, up 4.62 to 30.95, or 17 1/2%; low-priced Oclaro, Inc. (OCLR) 46 cents to 3.40, or 15%; Rare Element Resources Ltd. (REE) up 52 cents to 4.82, or 12%; LML Payment Systems Inc. (LMLP) 23 cents to 2.78, or 9%; and InterMune Inc. (ITMN) 1.36 to 14.51, or 10%.

Plexus Corp. (PLXS) snapped back 2.70 to 30.29, and Weight Watchers International, Inc. (WTW) gained 4.83 to 62.52, although it was nearly double that earlier in the day. CIENA Corp. (CIEN) rose 1.01 to 13.18, LSI Corporation (LSI) 49 cents to 6.71, Ocz Technology Group Inc. (OCZ) 53 cents to 7.63, Seagate Technology PLC (STX) 1.08 to 17.90, Cheniere Energy, Inc. (LNG) 54 cents to 9.30, and Seattle Genetics Inc. (SGEN) 92 cents to 17.41.

Select Comfort Corporation (SCSS), which was one of our Top 25 picks of the year, was up 1.11 to 23.38, along with Ulta Salon, Cosmetics & Fragrance, Inc. (ULTA) up 3.19 to 69.56, Western Digital Corp. (WDC) 1.46 to 32.76, Gamestop Corporation (GME) 1.13 to 25.26, and Centene Corp. (CNC) 1.75 to 41.10.

On the downside, only Netflix, Inc. (NFLX) lost more than a point on the long side, down 1.15 to 79.30.

Ultra-short VelocityShares Daily 2x VIX ST ETN (TVIX) went all the way down 1.24 to 26.16 and traded as high as 110 in early Octobe. The Direxion Daily Financial Bear 3X Shares (FAZ) lost 1.17 to 34.01.

Stepping back and reviewing the hourly chart patterns, the indices opened lower, and went sharply lower early on, but reversed and rallied sharply for the next several hours. They then backed and filled, and flagged at the end of the day in a positive manner on the Nasdaq 100 and S&P 500, but not quite on the Dow, although the Dow was 131 off the low and closed only down 2.72.

I'd call that a successful day.

Good Trading!

Harry

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