Market Overview

Indices Cascade Lower

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Indices Cascade Lower By Harry Boxer, an publication

The stock market indices had an extremely negative close as the mid-afternoon rally was completely taken back and then some. The day started out with big gaps down, as overnight futures were sharply lower. They stair-stepped their way lower to the morning lows around 2080 on the Nasdaq 100, which was off 80 points at that point. The S&P 500 dropped down to about 1125 from 1170, a very sharp loss of 45 points.

However, they bounced, stabilized, coiled, and then broke out early afternoon to 2140 NDX and 1160 on the S&P 500, recovering about 35 points on the S&P 500 and about 60 points on the NDX. When a mid-afternoon rally failed to extend, and the market started to rollover, support broke and the indices started to cascade lower. In the last 20 minutes they really dropped sharply, taking the NDX from 2105 to 2072, and the S&P 500 from about 1138 to 1120. Needless to say, they had a very negative close.

Net on the day, the Dow was down 519.83 t0 10,719.94, the S&P 500 down 51.77 to 1120.76, and the Nasdaq 100 down 87.70 to 2073.09. Advance/declines were a little better than 3 to 1 negative on the New York Stock Exchange, and about 4 1/2 to 1 negative on Nasdaq. Up/down volume on New York was about 17 to 1 negative with 127 million up, and 2 billion down on total volume of 2.2 billion. Nasdaq traded a whopping 3.5 billion with 3.2 billion to the downside, and had a 15 to 1 negative volume ratio. board was mostly lower, although there were some gainers today. Leading the way, of course, were the ultra-short ETFs. The Direxion Daily Financial Bear 3X Shares (FAZ) was up 11.00 even to 72.10, the iPath S&P 500 VIX Short-Term Futures ETN (VXX) up 3.91 to 35.17, and the Direxion Daily Large Cap Bear 3X Shares (BGZ) up 6.14 to 52.41.

In addition, Brigham Exploration Co. (BEXP) got up as high as 27.73, closing up 71 cents to 26.02, on 2 million shares. Coffee Holding Co.Inc. (JVA) gained 75 cents to 17.68, and Molycorp, Inc. (MCP) 55 cents to 51.55, which was only 3 points off its high. Mitek Systems Inc. (MITK) was up 17 cents to 8.00 even, Nanometrics Incorporated (NANO) up 46 cents to 15.21, SodaStream International Ltd. (SODA) 92 cents to 68.81, ahead of earnings, and Silicon Motion Technology Corp. (SIMO) 25 cents to 10.49.

Those were the gainers on our board today.

There were heavy losses on the downside today. Apple Inc. (AAPL) was down 10.32 to 363.69, and Goldman Sachs (GS) fell 12.39 to 110.34, which really hurt the market today. International Business Machines Corp. (IBM) lost 8.07 to 162.54.

Other losses of note included the Direxion Daily Small Cap Bull 3X Shares (TNA) down 6.84 to 38.58, Direxion Daily Financial Bull 3X Shares (FAS) 2.64 to 12.48, InterDigital, Inc. (IDCC) 2.00 to 69.73, MAKO Surgical Corp. (MAKO) 2.27 to 26.61, ServiceSource International (SREV) 1.49 to 14.85, and VirnetX Holding Corp (VHC) 1.62 to 18.17.

Stepping back and reviewing the hourly chart patterns, the indices were down sharply at the opening, stair-stepped their way lower, and by mid-morning they did start a rally that took back about three quarters of the losses. However, they weren’t able to capture all of them, and then rolled over to give back that entire rally, and then some, closing at the lows for the day going away at key support on the S&P 500 near 1120. Beneath that 1100-1101, if violated, could cause a cascade, waterfall-type decline.

Good Trading!


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