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Technical Trader Closing Brief

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Rally Propels Breakout Through 4−Day Down−Channel

Fri, Jun 26 2009, 05:27 GMT
by Harry Boxer

The Technical Trader


The markets had a very strong session today and technicals supported it.

The day started out to the downside and then immediately turned around on positive economic news. The markets exploded, set up bull flags mid-morning and then ran higher, flagged again and then completed a 5-wave advance by mid-day. An early afternoon pullback tested support successfully, but the bounce off of that was corrective-looking. When they rolled over late in the session, it looked like they were going to crack. The indices made nominal new lows below support, but could not follow through, and that resulted in a late sharp short-covering-fueled snapback that closed them near the highs for the day going away.

Net on the day the Dow was up 172.54 at 8472.40, the S&P 500 up 19.32 at 920.26, and the Nasdaq 100 up 28.76 at 1475.82.

Advance-declines were positive by better than 4 to 1 on New York and a like amount on Nasdaq. Up/down volume was 5 to 1 positive on New York on total volume of 1.2 billion. Nasdaq traded 2.2 billion and had a nearly 8 to 1 positive volume ratio.

TheTechTrader.com board as a result was mostly higher. Point-plus gainers included Apple (AAPL), up 3.64 at 139.86, and Goldman Sachs (GS), up 1.78 to 144.43.

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Among the ETFs we follow, iShares MSCI Brazil Index ETF (EWZ) jumped 2.05 to 53.22, and the iShares FTSE/Xinhua China 25 Index (FXI) was up 1.09 to 37.97. The U.S. Oil Fund ETF (USO) was up 96 cents today to 38.05 on firming oil prices.

Low-priced biopharma JAZZ Pharmaceuticals (JAZZ) on strong pre-market bullish drug news jumped 1.23 to 4.48 on nearly 15 million traded. Former portfolio position China Green Agriculture (CGA) jumped 94 cents to 7.96, closing at its high for the day.

Low-priced IFON advanced 47 cents or 40% to 1.61 on 2/3 million shares. Portfolio position 3Par (PAR) was up 48 cents to 11.60 on 900,000. Savient Pharmaceuticals (SVNT) was up 76 cents to 13.85 on 6.6 million. Vanda Pharmaceuticals (VNDA) jumped to 12, up 40 cents.

On the downside, the Direxion Small Cap 3x Bear (TZA) lost 2.12 to 22.74, the Direxion Financial Bear 3x Shares (FAZ) lost 27 cents to 4.82, and UltraShort Real Estate ProShares (SRS) dropped 55 cents to 20.45.

OncoGenex Pharmaceuticals (OGXI) gave back 82 cents to 21.23.

Stepping back and reviewing the hourly chart patterns, the indices had a significant technical session today in that the 4-day down-channel was broken to the upside and was confirmed by the SPX as well with strong technicals supporting the advance. Key resistance was taken out; however, the indices did back off of much more formidable resistance up near the 1480 NDX area and near the 922 area on the SPX. We'll see if they're able to break through them tomorrow.

Published on  Fri, Jun 26 2009, 06:55 GMT


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