Stock Market Turnaround Tuesday!

By: Harry_Boxer

The markets had a turnaround Tuesday. Despite the fact the futures were lower and the markets opened down sharply, they held support and rallied very sharply back, taking the Nasdaq 100 up to 1251 and change, a new multi-week rally high. However, the S&P did not take out yesterday's highs at that point, and when they pulled back and consolidated and then broke support the indices went sharply lower to test yesteday's lows on the Nasdaq 100, took them out on the S&P but couldn’t get the NDX to confirm.

Still, more of a consolidation day with a downward bias, but certainly a negative session for the indices.

Net on the day the Dow closed down 243, the S&P 500 21, and the Nasdaq 100 12.61. The Philadelphia Semiconductor Index (SOXX) was up 9.50, and for most of the day led the way higher, but closed about 7 points off its high, having been up about 16 1/2 earlier.

The technicals were negative by more than 2 to 1 on advance-declines on New York and Nasdaq. Up/down volume was nearly 3 to 1 negtive on New York on total volume of 2.4 billion. Nasdaq traded 2 1/4 billion and had 2 to 1 negative volume ratio.

As a result of the move up in the morning and then a swing down in the afternoon, the final results were mixed and narrowly so on many of the stocks we follow. Leading the way was DRYS, the star of the day, our Chart of the Day yesterday. It opened 8 , then roared to 10.85 before backing off late in the session to 9.45, but still up 2.28 today on 73.4 million, by far the heaviest volume in the company's history. Excel Maritime (EXM), also in that sector, at 7.14 was up 2.13 on 12 million shares. That was our Chart of the Day.

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The BGZ short instrument, with the markets down today, gained 2.81 to 54.56.

Mosaic (MOS) gained 1.86 in a mostly strong agriculture sector. AGU was up 84 cents, and POT up 53 cents. But most in that group were substantially higher in the late morning.

On the downside, SPWR got hammered for 4.05 to 30.84. UAUA was down 1.58 in a weak airline sector. MS dropped 1.33 to 14.97 on 28 million shares in a mixed financial sector.

The USO dropped 1.67 on the pullback in oil, and the FXI dropped 1.22. The BGU dropped 2.09 as well. ENER gave back 1.58, closing at 22.05 and RIMM lost 1.64 to 39.21.

Stepping back and reviewing the hourly chart patterns, the overall formations that exist on the NDX and S&P 500 still resemble bullish inverse head and shoulders type bottoms. After the takeout of the necklines recently, the following move got up to key overhead resistance but couldn’t take them out today, and they backed off to retest. The next few days should be interesting, but I'm still looking for more consolidation and backing and filling over the next day or two.

Good trading!

Harry

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