Thursday, July 29, 2010 - (TheTechTrader.com)

Distinct Four-Wave Decline

The stock market indices suffered a down day today, and although they started with a brief flurry to the upside, that was about it. They sold off quickly in the morning, tested support and bounced and then consolidated, with the S&P 500 acting a bit better than the Nasdaq 100.

But with Apple under pressure today, Nasdaq led the way down as they resumed their selloff in the afternoon when they broke through the neckline support around the 1,800 area on the NDX and 1,108 on the SPX.

In the afternoon, they sold off steadily to reach the 1,866-67 zone on the NDX and near 1,103 on the SPX. In the last half-hour they bounced back to pare the losses, but still ended up down on the day.

Net on the day, the Dow was down 39.81 at 10,497.88, the S&P 500 down 7.71 at 1,106.13, and the Nasdaq 100 down 16.19 at 1,872.62.

Advance/declines were almost exactly 2 to 1 negative on the New York Stock Exchange, and up/down volume just under 3 to 1 negative on light total volume of just over 1 billion shares today.

Advance/declines were 2 1/2 to 1 negative on Nasdaq, and the up/down volume was about 2 1/2 to 1 negative as well on just over 1.8 billion shares.

TheTechTrader.com board was mostly narrowly mixed, but the majority of stocks were on the downside, except for the ultra-shorts. However, portfolio position L & L Energy, Inc. had an excellent day, up 1.08 at 11.16 on nearly 1.5 million shares, breaking the stock out to new three-month highs.

In addition, Silicon Image Inc. jumped 1.00 to 4.35, with a solid percentage gain, and the Direxion Daily Small Cap Bear 3X Shares was up 1.47 at 31.65. Other than that, there were no other point-plus gainers on the board.

On the downside, Westport Innovations Inc. lost 2.36 at 18.63, OmniVision Technologies Inc. 1.32 at 23.03, Dendreon Corp. 1.47 at 33.39, Cree Inc. 1.42 at 71.61, Cirrus Logic Inc. 1.10 at 19.17, and Apple Inc. 3.12 at 260.96. The big loser today was Google Inc., down 8.28 at 484.35.

Stepping back and reviewing the hourly chart patterns, the indices had a distinct four-wave decline today and came off the lows in the last half hour, but it was definitely a negative day for the indices. Support now resides around 1,860-65 zone on the NDX, and around the 1,096-98 zone on the SPX. We'll see if that's able to hold tomorrow.

TheTechTrader will be on vacation until Thursday, August 5.

Good Trading!

Harry