Disastrous Session, May Cascade Lower
The stock market indices had a disastrous session and ended with sharp losses, closing near the lows for the day going away to cap off a very ugly week for the indices. The day started out with a big gap down on foreign markets and overseas news. The futures were sharply lower. The indices as a result actually opened lower. They bounced 30 minutes, but then stair-stepped their way lower the rest of the day in very neat, orderly channels failing at resistance for each rally attempt in a perfect 5-wave decline retesting the lows at the close and closing down negative for the day. Net of the day, the Dow was down 276.40 at 12,117.05, just 4 points off its low. The S&P 500 was down 32.32 at 1278.03, about a point off its low, and right near our target for the decline. We’ll see if we will go lower, it appears we may. The Nasdaq 100 down 66.04 at 2458.83. That was about 2 1/2% today, and right at its low. Advance-declines were 6 1/2 to 1 negative, with 428 up and 2614 down on the New York. The numbers were even worse on the Nasdaq, at 5 to 1 negative, with 2154 down and 403 up. Up/down volume was 12-13 to 1 negative on New York, with advancing volume over declining volume, 71 million up, and 892 million down. Nasdaq had 1.87 billion down and just 78 million up. Those were astronomical numbers and climatic in nature. The tick got to 11.55 in the last hour, but wasn’t as climatic as it could be. Watch out for Monday, because with Apple Inc. (AAPL) closing down 16.74 to 560.99, right near the low for the day, and Google Inc. (GOOG) down 9.88 to 570.98, along with some of the rest of the stocks we’ll go over here, you’ll see how negative today was, indeed. I’m looking for a climatic-type low early next week, or a snapback rally. But today was actually a crack of the pattern of the last week and a half. We may have substantially more downside to go, and we may cascade lower. TheTechTrader.com board did have some winners today, but they were mostly ultra-shorts. ProShares Ultra VIX Short-Term Futures ETF (UVXY), which we picked right at the opening, was up 2.45 to 23.47, or 17%, on 15.6 million shares. The VelocityShares Daily 2x VIX ST ETN (TVIX) jumped 1.25 to 10.35, or 14%, on 26 million shares. The Direxion Daily Financial Bear 3X Shares (FAZ), also a pick of ours, gained 2.81 to 29.82, or 10%, on 22.4 million shares. Direxion Daily Small Cap Bear 3X Shares (TZA) advanced 1.91 to 23.82, or 8 1/2%, on 23 million shares. Low-priced PharmAthene, Inc. (PIP), on a court ruling in its favor, was up 34 cents to 1.56, or 28%, on nearly 5 million shares. It was up to 1.84 earlier in the day. Low-priced Parkervision Inc. (PRKR) gained 31 cents to 2.20, or 16%, 1.1 million shares. Gold stocks were strong with Goldcorp Inc. (GG) up 3.17 to 39.40. Agnico-Eagle Mines Ltd. (AEM) steadily rose 3.32 to 40.66. Seabridge Gold, Inc. (SA) spiked up to 15.91, closing at 15.86, up 69 cents today. Endeavour Silver Corp. (EXK) gained 71 cents to 9.39. Pan American Silver Corp. (PAAS) gained 60 cents to 17.18. So you can see, gold and silver stocks stormed across the board today. Other gainers of note included Vringo, Inc. (VRNG), up 32 cents to 4.11, or 8 1/2%, on 4.3 million shares. In addition, fractional gainers included Rosetta Genomics, Ltd. (ROSG), up 64 cents to 14.39, and Amylin Pharmaceuticals, Inc. (AMLN), up 22 cents to 26.73. Those were the stocks on the plus side today. Other than the ultra-shorts, there weren’t many others. On the downside, it was a bloodbath. The Direxion Daily Financial Bull 3X Shares (FAS) gave back 8.13 to 70.55, and the The Direxion Daily Small Cap Bull 3X Shares (TNA) lost 4.19 to 43.07. The ProShares UltraShort Silver (ZSL) was down 3.86 to 65.10. In addition to those, besides Apple and Google, which we’ve already mentioned, multiple-point losers included Amazon.com Inc. (AMZN), down 4.69 to 208.22, Goldman Sachs (GS) down 3.06 to 92.64, International Business Machines Corp. (IBM) down 3.82 to 189.09, and Sourcefire, Inc. (FIRE) 5.30 to 49.86. SINA Corporation (SINA) was down 2.29 to 50.98, OmniVision Technologies Inc. (OVTI) got hammered for 2.79 to 13.40, Cheniere Energy, Inc. (LNG) lost 1.44 to 12.60, and Cirrus Logic Inc. (CRUS) down 2.80 to 25.92 to mention a few. There were just too many to mention them all. Stepping back and reviewing the hourly chart patterns, the indices gapped down, spiked down, and then bounced, but that was brief. They kept stair-stepping their way lower all day on the S&P 500 in a beautiful 5-wave decline in a parallel channel, with each rally failing at resistance, and each rally jilting into new lows, except for the final pullback into the close, which closed at earlier low’s attempt at holding support. It was a very, very frustrating day for most investors on the long side, for sure. A very negative end for the session and the week. Good Trading! Harry
