Harry's Closing Boxer Brief
Daily Technical Market Analysis
Tue Aug 16th 2005
Indices Hammered, Close Near Key Support
By Harry Boxer, The Technical Trader (www.thetechtrader.com)
We had a very negative, bearish day for the indices, as the indices were down from the get-go with a gap down at the opening. They paused to form a bear flag, went lower in mid-morning and then consolidated for a couple hours. But that looked like more bear flags and sure enough the market headed south again after lunch in a two-step decline that saw it sell off sharply. The late bounce that occurred was followed by last few minutes of selling that took the indices back down towards the lows for the day, with the S&P 500 closing at the low with the Dow not far off it.
Net on the day the Dow was down more than 121, the S&P down more than 14 1/2 and the Nasdaq 100 about 26 3/4. It was a very negative day for the SOX Index, which led Nasdaq down and was down more than 2 percent, or 9 1/2 points.
The technicals were very negative by 23 to 9 1/2 on New York and 22 to 8 on Nasdaq. Up/down volume was also very negative by more than 5 to 1 on New York on total volume of less than 1.4 billion. Nasdaq traded about 1.5 billion, with about 1.1 billion to the downside, or about an 11 to 4 negative ratio.
TheTechTrader.com board was mostly lower. There were a couple outstanding stocks to the upside. Spire Corp (SPIR) rocketed ahead, up 2 3/4 on 8.8 million shares, after a stellar earnings report last evening. But even that was 1.50 off the high.
ViroPharma (VPHM) exploded by 3 1/4 on more than 20 million shares and closed not far from the highs for the day. Other than that, Netflix (NFLX) was up 27 cents, and Amylin Pharmaceuticals (AMLN) was up 27 cents as well.
But most stocks were down on the day, led by Dynamic Materials (BOOM) down 1 1/4, Genesis Microcap (GNSS) down 1.18, Broadcom (BRCM) 1, and Cutera (CUTR) 1.02.
Miva Inc. (MIVA) got hammered for 81 cents, Forward Industries (FORD) also dropped 81 cents, Georesources (GEOI) 62 cents, and Energy Conversion Devices (ENER) dropped 50 cents in the alternative energy sector, along with DayStar Technologies (DSTI) down 29 cents and Evergreen Solar (ESLR) down 13 cents.
Stepping back and reviewing the hourly chart patterns, the indices failed to follow-through on yesterday's breakout rally, and by gapping down early set the trend for the rest of the day. The indices did close at the bottom of the two-week down-channel on the Nasdaq 100, and the S&P closed right at important two-month support around the 1219-20 zone, so we're in for some key testing tomorrow morning, and right now the indices are vulnerable to more selling.
Good trading!
Harry
