Closing Technical Market Comments for Mon Nov 26, 2007
Indices Plunge Late in the Session
By Harry Boxer, The Technical Trader (www.thetechtrader.com)
The markets had a very interesting session, but a very negative one to start the week and kind of a surprise to many people we spoke to. As usual the market does the opposite of what most people expect.
The market did start out with a strong burst to the upside at the get-go, providing some positive early trading gains for TheTechTrader today. But then we had a sharp morning pullback. A nice snapback recovered about 50% of the losses, but then they rolled over mid-day, plunged hard and fast and steadily throughout the afternoon & into the close.
The Dow was down 237 1/2 at the close, the S&P 500 off 33 1/2, and the Nasdaq 100 39 1/2. The Philadelphia Semiconductor Index (SOXX) fell more than 11 points.
It was a very bad day technically, with the advance-declines 3 to 1 negative on New York and about 2 1/2 to 1 negative on Nasdaq. But the story was in the up/down volume, where the majority was sharply negative to the downside by 6 1/2 to 1 on New York and by about 5 to 1 on Nasdaq.
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TheTechTrader.com board was mixed, with some major downside reversals today, particularly on many of the momentum stocks . DryShips (DRYS), for example, which had run up to 80 1/2 in the morning, closed at 69.67, down 7.28, an 11-point , major negative high volume reversal. Excel Maritime (EXM) did the same, dropping from 43 1/2 to 36 3/4, before closing at 37.58, down 1.78. TBSI, also in the shipping sector, was down 2.12.
Other losses of note, Chindex (CHDX) dropped 2.10. BIDZ, our Chart of the Week, was up sharply in the morning. However, a negative article came out on it, and the stock dropped from 22 1/2 to 16, closing at 16 1/2, down 3.38, after being up as much as 2 1/2 earlier in the day, a major negative reversal there as well. VMware (VMW) lost another 7.40. JRJC in the Chinese sector was down 2.74, and Blue Phoenix (BPHX) dropped 1.10. Ascent Solar (ASTI) got hit hard, closing at 33.47, down 1.70.
On the plus side, Hoku Scientific (HOKU) on a big contract was up 2.30 today, a major percentage gainer and the third leading Nasdaq gainer, up 38% today. Chinese hotelier Home Inns & Hotels (HMIN) gained 2.11 today, and Cree Inc. (CREE) on takeover rumors jumped 3.21, as one of their competitors was acquired.
As you would imagine the ETF short instruments did well, with the SDS up 2.41, QID up 1.39, and the DUG up 1.85.
With oil down today, the XLE was off 2.35.
Stepping back and reviewing the hourly chart patterns, the indices plunged late in the session, taking out trendlines and support levels. The NDX tested last week's lows, and the S&P 500 took them out.
The S&P is now at its lowest level since just after the August lows. Strong technical damage has been done, the indices continue to move lower, and don't appear to be done yet. The fact that we started the week on such a negative note with such a strong seasonal tendency is certainly an ominous sign & not good for the indices. We'll soon see how deeply they take this before they can reverse.
Good trading!
Harry
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