A very nasty session, starting off with a sharp move down and then morning consolidation patterns that appeared very much to be bear-flag consolidations, and sure enough by mid-day when they started breaking the patterns the indices went quickly lower. They retested the lows, tried to bounce around that level, but was rather anemic, and in the afternoon they rolled over sharply. With about 15 minutes to go they were sharply lower at the lows for the day, down nearly 700 on the Dow, 78 on the SPX ,but a very sharp late snapback in the last 15-20 minutes, perhaps fueled by short covering, brought the Nasdaq 100 back about 35 points and the S&P 500 about 25 points, before they settled back a bit.

Net on the day the Dow was down 514 at 8519, the S&P 500 down more than 58 to just under 897, and the Nasdaq 100 down 46.34 at around 1237. The Philadelphia Semiconductor Index (SOXX) got under 220, down 14.39, a more than 6 percent loss today to multi-year lows.

The technicals were very negative by about 5 1/2 to 1 on advance-declines on New York and by about 6 to 1 on Nasdaq. Up/down volume was extremely negative, with 1 1/2 billion to the downside and just 51 million to the upside on New York. On Nasdaq it was almost as bad, with 2 1/4 billion to the downside and 328 million to the upside, about 7 to 1 negative.

TheTechTrader.com board was mostly lower. Only the short instruments had spectacular days today, led by the SDS up 2.60, DUG up 8.78, the QID up 4.15.

In the individual stocks Apple (AAPL) had a strong session after a terrific earnings report. Although it closed way off the high it was still up 5.38 on nearly 80 million shares traded Broadcom (BRCM) gained 90 cents but was about 1.20 off the high, on 30 million, also on strong earnings.

The airlines were strong, with Continental (CAL) at 18.50 up 1.05, and UAL (UAUA) at 14.65 up 85 cents, but that one was 1.60 off its earlier high over 16.

On the downside leading the way was Alpha Natural Resources (ANR) at 32.37 down 8.10. CF was down 6.05 at 49.88.

Other multiple-point losers included POT down 6.26, SPWR down 5.98, Mosaic (MOS) down 4.52, Energy Conversion Devices (ENER) down 6.59, Agrium (AGU) down 4.32, and EWZ down 5. The USO also dropped 3.91.

Stepping back and reviewing the hourly chart patterns, we got a very nasty slide in the afternoon. Despite the hard rollover and spike down into last week's lows, they ended up making higher lows and rallied sharply.

But obviously the jury is still out whether these lows can hold, and whether we've put any type of important bottom in. However, today was an important cycle low and turn date potentially, and we'll have to see over the next day or two if there's any upside follow-through at all.

But right now the slide of the last 2 days was indeed a nasty one, with the NDX having dropped from over 1350 to 1210, 140 points just since yesterday morning. The S&P dropped from 984 to 875, 109 points, so very quick, sharp declines over the last 2 days have taken the indices back to retest the lows.

We'll have to wait & see over day or so whether they can hold them, or whether they end up taking out the lows and spiking even more sharply lower.

Good trading!

Harry

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