Closing Technical Market Comments for Mon Aug 14, 2006
Indices Nearly Give It All Back in the Afternoon
By Harry Boxer, TheTechTrader.com (www.thetechtrader.com)
The indices had a strong early morning rally but nearly gave it all back at the end of the day and barely closed ahead on the session. The day started out with a large gap-up based on the Israeli-Hezbollah cease-fire. They pulled back very bullishly in the morning, consolidated and rallied very strongly right into the lunch hour, at which time they reached the session highs. The pullback during lunch hour accelerated after lunch hour, broke back down through key support levels and accelerated lower. Only a late stabilization prevented them from going any lower.
Net on the day, the Dow was up less than 10 and 115 points off its session high. The S&P 500 was up 1 ½ points, but more than 10 points off its high. The Nasdaq 100 was up 7 ½, nearly 20 points off the high, and the Philadelphia Semiconductor Index (SOXX) was about 6 points, up 4.52, and that certainly helped Nasdaq stay positive today.
The technicals remained positive but weakened quite a bit from earlier in the day. Advance-declines were positive by just 300 issues on the New York Stock Exchange and about 340 issues on Nasdaq. Up/down volume was 7 to 6 positive on New York and about 2 ½ to 1 positive on Nasdaq. Total volume was lighter today, with New York trading about 1 1/3 billion and Nasdaq just short of 1.5 billion.
TheTechTrader.com board was mixed but mostly higher. Again, a lot of stocks came way off their highs. The leaders today were U.S. Global Investors (GROW), one of this week’s “Charts of the Week," up 1.34 today. NVE Corp. (NVEC), another of our recent picks, was up 1.09. DXP Enterprises (DXPE), also one of this week’s Charts of the Week, was up nearly a point. Broadcom (BRCM) gained 1.08 and the SMH 56 cents, while Rambus (RMBS) rose 62 cents and All Scripts Healthcare (MDRX), one of our portfolio positions, 43 cents.
On the downside, the loss leader was Baidu.com (BIDU) down 1.05, and Pacific Ethanol (PEIX), to a new six-month low, down 1.08, closing near 15. The stock traded over 44 just 90 days ago!
OMNI Energy (OMNI) was off 74 cents today and broke under 10 support, and Dynamic Materials Corp. (BOOM) gave back 56 cents.
Stepping back and reviewing the hourly chart patterns, the NDX got up to just over the 1515 level, which is just under last week’s rally high, and backed off sharply from resistance. The S&P got up to 1279, but fell about 5 points short of last week’s high, and also backed off sharply in the afternoon.
With the NDX closing right at 21- and 40-day moving average support on my hourly charts, but the S&P breaking down beneath that, the patterns are very tentative here, and we’ll see if key support beneath here can still hold around the 1477-80 on the Nasdaq 100 and the 1261-62 zone on the S&P 500.
Good trading!
Harry
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