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Technical Trader Closing Brief

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Choppy Session Ends Mixed with Weak Close

Tue, Jul 1 2008, 06:05 GMT
by Harry Boxer

The Technical Trader

The markets had a choppy session with some volatility on Monday, but at the end of the day they rolled over very hard and closed at the lows for the day going away on the Nasdaq 100 and not far from them on the S&P 500. The Dow was barely up on the day as well, so I'd have to call it a mixed session and a somewhat disappointing one considering the late rally on Friday.

The day started out with a pullback that touched support and held. Then they came on pretty strongly, went to the session highs and then tested Friday's rally highs and session highs on the S&P 500 but were unable to punch through. They rolled over pretty hard and by early afternoon took out the lows slightly on the Nasdaq 100, but at that point the S&P 500 was far from confirming. They rallied back up, nominally took out initial resistance but couldn't follow through and then rolled over hard into the close, particularly in the last 15 minutes.

Net on the day the Dow was up just 3.50 and the S&P 500 up 1.62, but the Nasdaq 100 was down 18.63 and closed 26 points off its high. The Philadelphia Semiconductor Index (SOXX) fell 0.93 and was 7 points off the high.

The technicals were decidedly negative by about 3 to 2 on New York and nearly 2 to 1 on Nasdaq. Up/down volume was 9 to 7 negative on New York on 1.6 billion traded. Nasdaq traded a little over 2 billion, and had about a 3 1/2 to 1 negative ratio.

TheTechTrader.com board as a result was mostly negative, but there were some positive stocks on the upside. Chart of the Week General Steel (GSI) popped near the opening, and although it backed off late in the session was still up 1.67 today on 1 1/2 million.

Energy Conversion Devices (ENER) had a strong start and held about half the gains, closing up 2.32. Recent Chart of the Week A-Power Energy (APWR) snapped back from recent losses, bouncing off support at 24.50, closing at 26.65, up 1.59.

Other point-plus gainers of note, Pyramid Oil (PDO was up 1.67, and Sequenom (SQNM) continuing its recent rally moved over 16, closing at 15.96, up 67 cents on nearly 2 million.

TBS International (TBSI) in the shipping sector was up 1.04, but DryShips (DRYS) was off more than 4 today, and Excel Maritime (EXM) was ahead just a small fraction.

On the downside, other than DryShips the only point-plus loser on our board today was Mexco Energy (MXC), down 2.51.

Stepping back and reviewing the hourly chart patterns, it was a disappointing finish to a promising start today. It ended in a mixed session as the indices continued to try to stabilize and base, but if they don't right themselves pretty soon they could roll over again, making the last two days nothing more than a consolidation or resting point before lower prices result.

We're at a key point with the indices right now. Oscillators are oversold and cycle lows are due in this timeframe and we're still expecting a more substantial snapback rally to begin sometime in the next day or two.

Published on  Tue, Jul 1 2008, 06:07 GMT