Harry's Closing Boxer Brief
Daily Technical Market Analysis
Tue Aug 23rd 2005
Four-Week Downtrend Continues
By Harry Boxer, The Technical Trader (www.thetechtrader.com)
The four-week downtrend continued today as indices failed on two occasions to break out above key resistance levels and moving averages, and suffered losses on the session.
The day started out with a move up at the opening, followed by a pullback retest and another bounce that failed beneath the earlier highs. Then they rolled over hard in the morning, with the S&P taking out the 4-day support lows at 1216, reaching as low as nearly 1214. The NDX, however, did not confirm that and made a higher low and at the beginning of the lunch hour, the market started firming up and accelerated after the lunch hour. With about an hour and twenty minutes to go, the NDX matched its early morning high, the S&P fell short, and they rolled over, giving back the rally gains and closing in negative territory.
On the day the Dow was down 50.31, the S&P 4.14, the NDX down 4.29, and the SOX off 0.2. That kept Nasdaq from suffering bigger losses.
The technicals were negative ,with advance/declines lower by 9 to 7 on New York and 16 to 13 on Nasdaq. Up/down volume was a little better than 3 to 2 negative on New York, and about 7 to 5 negative on Nasdaq. Total volume on New York was about 1 1/4 billion and on Nasdag about 1 1/3 billion.
TheTechTrader.com board was mixed. There were some outstanding issues to the plus side. Amylin Pharmaceuticals (AMLN) soared more than 6 points on 32 million shares today on positive drug test news, closing at 28. Catuity (CTTY) back to its old tricks was up 2.55 today. Former Chart of the Week and current favorite Energy Conversion Devices (ENER) went to a new 4-year high today, closing at 28.20, up 1.25.
Other stocks of note, recent Chart of the Week IPIX Corp. (IPIX) advanced 50 cents and broke key resistance in the 3.95-4 range, closing at 4.10. Sirna Therapeutics (RNAI) advanced 53 cents on more than 1 million shares. Universal Display Panel (PANL) was up 31 cents, ID Biomedical (IDBE) was up 31 cents, and Distributed Energy Systems (DESC) up 28 cents.
Stepping back and reviewing the hourly chart patterns, the 60-minute charts show distinct downtrends -- parallel channels -- and today's indices failed at a similar place to other rallies during this decline at the 40-day moving average. So the trend is your friend and the trend is still down. I think we may have another shot to the downside, but we may be within a day or two of an important trading bottom.
Good trading!
Harry
