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Technical Trader Closing Brief

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Climactic−Type Selling

Thu, Nov 20 2008, 08:01 GMT
by Harry Boxer

The Technical Trader

Another very negative day on the Street as the bear market continues in earnest. Despite the fact that futures were down for most of the pre-market, they ended up opening firm and rallying back to initial resistance. When they couldn't break through they sold off sharply to retest yesterday afternoon's lows, backed and filled for several hours and on three different occasions ran right up to initial resistance but once again couldn't get through. Late in the session when it was apparent the rally was not going to materialize, they rolled over in the sharpest decline of the session, closing at the session lows.

Net on the day the Dow closed under 8000 at 7997, down 427.47. The S&P 500 slipped 52.54 to 806.58, and the Nasdaq 100 slipped under 1090, closing at 1087.60, down 68.50. The Philadelphia Semiconductor Index (SOXX) got hammered, closing at 177.10, down 14.79 to a new multi-year low.

Advance-declines were climactic in nature, with nearly 3000 down and only 193 up on New York and 2567 down and only 332 up on Nasdaq. Up/down volume was monstrously climactic with 1.6 billion down and less than 28 million up on New York, a 57 to 1 ratio! Nasdaq had 2 1/3 billion down and 53 million up, or a 44 to 1 negative volume ratio.

So, to say the least, technicals were extremely climactic in nature at levels we haven't seen in years. We did get a negative tick today of -1324 on the NYSE, also an extremely negative number.

TheTechTrader.com board reflected that. Other than the three short instruments we follow, everything else was down. Those instruments are the BZG, which closed at 102.80, up 14.92. The SDS at 112.94, was up 11.39, and the QID at 90 1/4 up 8.74.

On the downside, loss leaders included the ERX down 7.89, BGU down 5.56, DIG 3.49, and the EWZ 3.01. The FXI dropped 2 to 22.20 and QLD dropped 2.62.

Among regular common stocks, AAPL lost 3.62 to 86.29 and closed not far off its multiple lows in the 85 zone. AFAM at 42.77 was down 4.12, CF at 44.49 was down 5.90, and POT at 64.02 down 5.92.

Airlines got hammered today, with UAUA at 8.56 down 2.47, a big percentage loss there. Delta closed at 7, down 88 cents, and Continental closed at 11.31 down 1.19, and American at 6.85 was down 1.14.

Also in the agricultural group, MOS at 28.75 was down 2.62, and AGU at 28.74 was down 2.65. C closed at 6.40, down 1.96. DryShips (DRYS) got crushed at 5.34, down 2.67, on 16 million shares. Energy Conversion Devices (ENER) at 23.42 was down 2.89, Excel Maritime (EXM) also in the shipping sector at 6.59 down 1.74, and Las Vegas Sands (LVS) at 5.07 down 1.19.

Morgan Stanley dropped 1.78 to 10 1/4 and RIMM despite early gains lost 1.92 to 45.33. Sequenom (SQNM) gave back 1.11 at 13.89.

Stepping back and reviewing the hourly chart, the indices have plunged beneath last week's lows, and the S&P 500 and Nasdaq 100 are now at a 5 1/2-year lows. So we've taken out key support and may have set up a very nasty climactic type session in the next day or two, but I'm anticipating a strong snapback at some point. Right now the trend is down and in freefall, but climactic in nature and close to what appears to be a tradable low just ahead of us.

Published on  Thu, Nov 20 2008, 08:03 GMT