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Technical Trader Closing Brief

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Solid Follow−Through Session

Fri, Aug 29 2008, 06:14 GMT
by Harry Boxer

The Technical Trader

The market had a very solid & bullish follow-up session on Thursday. They started out with a bang, gapping up on higher futures. They consolidated in very bullish-looking flags early on, and the market certainly broke out of those flags, went higher, consolidated again, and then broke out a second time, reaching the highs for the day on the Nasdaq 100 around late morning, at around 1921. At that point the S&P also consolidated, but moved higher, and on three different occasions made higher highs in the afternoon without any confirmation from the Nasdaq 100, which basically went sideways for the rest of the day. Yet the overall pattern still remained bullish, and have broken declining tops lines and lateral price resistance on the S&P 500, although not so on the Nasdaq 100.So we need to get conformation over the next day or two. Perhaps early next week.

Net on the day the Dow was up 212.6, and closed right at the high for the day going away. It was the same with the S&P 500, which managed to get back over 1300, closing at 1300.68, up 19. The Nasdaq 100 closed 6 points off the high, but was still up nearly 15 at 1915. The Philadelphia Semiconductor Index (SOXX) was up 4.02, at just under 363.

Reviewing the technicals, advance-declines were extremely positive by about 4 to 1 on New York and a little less than 3 to 1 positive on Nasdaq. Up/down volume was about 4 1/2 to 1 positive on New York on total volume of about 950 million. Nasdaq traded a little over 1.6 billion and had a ratio of 4 1/2 to 1 positive on advancing over declining volume.

So, pre-holiday volume was quite low today, although it came on strong near the close.

As a result of the late surge in the S&P 500, the vast majority of stocks on TheTechTrader.com board were up today, and some strongly so.
Leading the way was Chart of the Week SunPower (SPWR), at 96.96, up 3.52. Fannie Mae (FNE) had a terrific session today, surging into the close, closing at the high for day going away at 7.95, up 47 cents on 126 million shares today. Lehman (LEH) also was sharply higher, up 1.09 on 35 1/2 million.

Portfolio position Sequenom (SQNM) had an excellent session at 22.80, up 1.02, on nearly 1 million. United Airlines (UAUA) snapped back sharply on the drop in oil, closing at 11, up 1.12 on more than 31 million traded.

Fuel Systems (FSYS) snapped back 1.52 to close at 52.71. Former Chart of the Week Almost Family (AFAM) set a new all-high today at 45.87, up 2.08.

On the downside, there were only a few stocks to speak of that had significant downside movement. Although Energy Conversion Devices (ENER) nearly matched its all-time high early in the morning at over 83, it dropped sharply after its earnings conference call, by nearly $10, getting down to 73.40 at the low. It bounced back 3, and net on the day was down 1.79 on 7 million shares.

The USO oil ETF was down 2.27 with the drop in oil, and the SDS was down 1.61 with the rise in the S&P today.

Stepping back and reviewing the hourly chart patterns, the indices had a solid follow-through session. Although volume was light in this pre-holiday session, the patterns are promising on the S&P and need some confirmation on the NDX.

Published on  Fri, Aug 29 2008, 08:29 GMT