Definitive Down-Day Ends First Week of the Year

[Harry Boxer]

It was a negative ending to the week and a continuation of some of the volatility we’ve seen since the start of the year, but the blue chips performed much worse than Nasdaq today. The day started out with a fairly sharp move lower. They bounced for about an hour in what looked like bearish flag patterns and sure enough they rolled out of them to the downside and hit the session lows just after 11 am.

They rallied through the lunch hour into early afternoon but pulled back into mid-afternoon, and retested the lows on the blue chips, but firmed back up in the last hour or two to take back some of the losses.

Still, net on the day the Dow was down below 12,400, at 12,398, down 82.68. The S&P 500 closed under 1410, down 8.63. The Nasdaq 100, however, was down just 7.60 at around 1785, with the Philadelphia Semiconductor Index (SOXX) down 5.33, closing at 469

So, a negative end to the week, and other than yesterday’s rally, a volatile and uninspiring start to the year, particular on the blue chips.

The technicals bore out the negative day today, with 3 to 1 advance-decline advantage for the losers on both New York and Nasdaq.

Up/down volume was a like amount on New York, with about a 3 to 1 negative plurality on total volume of 1.7 billion. Nasdaq traded more than 2.1 billion and had a 2 ½ to 1 negative ratio.

TheTechTrader.com trading board was mixed. On the plus side, Chinese hotelier Home Inns & Hotels (HMIN), a model portfolio holding of ours, was up 2.03 today on nearly a million shares. Syntax-Brillian (BRLC) was up 1.25 on 7 ¼ million to a new 2 ½-year high. Portfolio position VASCO Data Security (VDSI) broke out yesterday and followed through today, and is at 5-year highs, up 71 cents on 1.2 million.

Other than that there were just fractional gains. Global Sources (GSOL) and Chindex (CHDX) were each up 25 cents.

On the downside, loss leaders were Aluminum Corp. of China (ACH), down 1.96 and Gmarket (GMKT), down 1.04.

Other losses of note, Fuwei Films (FFHL) was down 65 cents, Fuel Tech (FTEK) 55 cents, China GrenTech (GRRF) 66 cents and Simpletech (STEC) 68 cents. Sigma Designs (SIGM) gave back 74 cents and Qiao Xing Universal Telephone (XING) 44 cents.

Chinese stocks had a very difficult session today, as the 2-day sell-off continued.

Stepping back and reviewing the hourly chart patterns, very key 6-week support was tested today on a couple occasions, but held on the S&P 500, with the Nasdaq 100 holding up better for a change. We’ll see if they have any kind of follow-through, or if they want to take a more definitive direction next week.

Good trading!