Closing Technical Market Comments, Tue Jun 12, 2007
Volatile Session Ends Near the Day's Lows
By Harry Boxer, The Technical Trader (www.thetechtrader.com)
The markets ended very poorly and near the lows for the day going away. The day, however, was pretty volatile. They gapped down at the opening, bounced back sharply but failed at resistance and then sold off to new lows, but then came on again in a 3-wave rally, the third wave being a very sharp early-afternoon surge that took the indices into plus territory, just a tad above key overhead resistance, but they failed to follow through and sold off just as sharply if not more so in the afternoon.
Net on the day the Dow was down 130, the S&P 500 off 16 plus, the Nasdaq 100 down more than 11 ¼, and the Philadelphia Semiconductor Index (SOXX) down 4 ½.
Technicals were very negative, nearly 29 to 4 on declines over advances on the NYSE, a more than 7 to 1 ratio. On Nasdaq that ratio was about 3 to 1 negative. Up/down volume was even worse, with 181 million up and 1.4 billion down today, about an 8 to 1 negative ratio on New York on total volume of a little more than 1.6 billion. Nasdaq traded more than 2 billion and had a 3 to 1 negative ratio on declining over advancing volume.
TheTechTrader.com board was mostly negative, though MFRI (MFRI) soared 3.58 after announcing late Monday that its first-quarter profit grew more than six-fold. The maker of air filters and piping systems used in energy projects is our Chart of the Day http://www.thetechtr...index.php?id=42
The losers on our board were led today by DXP Enterprises (DXPE), down 2.30, and NVE Corp. (NVEC), down 1.15. Those were the only point-plus losers on our board today.
Other losers of note, Transcend Services (TRCR) dropped 67 cents, Research Frontiers (REFR) down 58 cents, Industrial Services of America (IDSA) 61 cents, Color Kinetics (CLRK) down 50 cents, and VeriChip (CHIP) down 79 cents.
Among the other gainers, the QID ETF of course was up 54 cents. Chinese hotelier Home Inns & Hotels (HMIN) gained 88 cents, Spectrum Control (SPEC) up 42 cents and Exide Technologies (XIDE) up 53 cents, snapping back after an earnings report. Force Protection (FRPT) also showed strong relative strength today, up 65 cents.
Stepping back and reviewing the hourly chart patterns, the indices failed at declining moving average resistance on the 60-minute charts for the S&P 500 and NDX, rolled over sharply, and closed very poorly, particularly on the S&P and Dow, with the Dow cracking 13,300, closing just pennies off its low.
I expect more downside, particularly if we get a follow-through and crack the 1870-80 support zone on the NDX. That’s an area we’ll be watching closely, as well as the 1488-90 zone S&P, which is about 5 points beneath here.
Good trading!
Harry
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