The indices had a solid up-session, and the technicals improved vastly over yesterday. Most of the upside progress was made in the first couple hours, as the indices started off with a strong move, consolidated after about an hour, and then rocketed ahead, taking out key resistance on the Nasdaq 100, reaching a new multi-year high just past the 1840 level. The S&P 500, however, failed to confirm, and fell short of the 1430-32 resistance zone, getting up as high as 1427. They spent the rest of day consolidating, pulling back a couple times, but holding and then firming back into the close.
The Dow was up 73 on the day, the S&P 500 around 9, and the Nasdaq 100 up 18.71. The Philadelphia Semiconductor Index (SOXX), however, was down today, surprisingly so, with some weakness in the semiconductor sector, as that group was downgraded by several firms.
The technicals confirmed the advance with a 23 to 10 positive ratio on advance-declines on New York and about 2 to 1 on Nasdaq. Up/down volume was a little less than 2 ½ to 1 positive on New York, on total volume just under 1 2/3 billion. Nasdaq had heavy volume of just under 2.4 billion, with a ratio of better than 2 to 1 positive.
TheTechTrader.com board was mixed and narrowly so. The leading gainers were Sigma Designs (SIGM), up 1.03, and Energy Conversion Devices (ENER), up 1.01 as Jefferies named it their top pick for 2007.
Other gainers of note, recent Chart of the Week ISIS Pharmaceuticals (ISIS), one of my top picks for ‘07, was up 62 cents. NexCen Brands (NEXC), last Sunday’s Chart of the Week, was up 41 cents, reaching over 9 for the first time in 5 years.
VASCO Data Security (VDSI) continued its winning ways, up 83 cents to another new 6 year highs, and Fuel Tech (FTEK) gained 30 cents today.
On the downside, Chinese stocks were mixed to lower, with China Precision Steel (CPSL) getting hammered back for 1.33 and China GrenTech (GRRF) down 1.16. Those were the loss leaders on my board.
Other losses of note, Home Inns & Hotels (HMIN) lost 60 cents and Gmarket (GMKT) 64 cents. Telestone Technologies (TSTC) gave back 42 cents and Simpletech (STEC) 36 cents.
Stepping back and reviewing the hourly chart patterns, a key breakout occurred today on the Nasdaq 100 but was not confirmed by the S&P or Dow, and although they both appeared to be still in control by the bulls, divergences and other negative technical factors do exist.
So the next few days should be critical to the market’s direction.
Harry Boxer is a technical consultant to many Wall Street hedge funds and large institutional traders, and author of TheTechTrader.com, a real-time diary of his day, swing and intermediate-term trades. For more of Harry Boxer, sign up for a free 15-day trial to his Real-Time Technical Trading Diary, or sign up for a free 30-day trial to his Top Charts of the Week service.
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