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Solid Stock Gains, But Substantially Off Highs
By Harry Boxer
Published on 02/1/2012

The stock market indices had a very strong session, but a late afternoon sell-off really took the excitement out of it by taking back a big chunk of the gains in the last hour or so.

Solid Stock Gains, But Substantially Off Highs

The stock market indices had a very strong session, but a late afternoon sell-off really took the excitement out of it by taking back a big chunk of the gains in the last hour or so. The day started out with a large gap up, and then they pulled back sharply, particularly on the Nasdaq 100, but not on the S&P 500. That held very well, holding the 1321 support area. They then started a rally that stair-stepped sharply higher all morning and into the mid-afternoon. The NDX jumped from 2474 to 2497, and the S&P 500 jumped from 1321 to 1330.50. They came down, bounced, formed a mini head-and-shoulders, and then broke late in the session. There was a little bit of a snapback at the close, but not much.

The indices ended the session up, but it was a little disappointing.

Net on the day, the Dow was up 83.55 at 12,716.46, down from the high at 12,784.62, or nearly 70 points off the high. The S&P 500 was up 11.67 to 1324.08, or 6 1/2 points off the high, and the Nasdaq 100 up 20.23 at 2488.18, or 9 points off its high. It was only 2 1/2 points under 2500 at the high for the day.

It was a very good technical day today. Advance-declines were 5 to 1 positive on the New York Stock Exchange, and 3 1/2 to 1 positive on Nasdaq. Up/down volume was 6 1/2 to 1 positive on New York, with total volume of 877 million shares traded today. Nasdaq traded just under 2.1 billion shares, with nearly 1.8 billion to the upside.

It was a very strong day on Nasdaq, in particular. All of that despite the fact that Apple Inc. (AAPL) barely changed today at all, losing 29 cents to 456.19. The rest of Nasdaq stocks did well today. Microsoft Corporation (MSFT), which was over 30 at one point in the day, closed up 36 cents to 29.89. That’s the first time in a couple years that it’s been over 30.

TheTechTrader.com board, as a result, had a positive day today. Leading the way by far, Key Tronic Corporation (KTCC), on a 1000% increase in volume, was up 2.71 to 8.95, or 43.4%, on 1.5 million shares on a massive technical breakout from a major base pattern. Medivation, Inc. (MDVN) gained 12.16 to 67.57, or 22%, on positive drug news and a takeover. Multimedia Games Inc. (MGAM) advanced 2.63 to 10.16, or 35%, on 1.6 million, also over a 1000% increase in volume in a key technical breakout today. Corinthian Colleges Inc. (COCO) rose 1.10 to 4.13, or 36.3%, on 11 million. That also broke out today.

There were very many breakouts across the board today.

In addition, Sangamo BioSciences, Inc. (SGMO) was up 74 cents to 4.19, or 21 1/2%; RadiSys Corporation (RSYS) up 1.34 to 7.37, or 22.22%; LiveDeal, Inc. (LIVE) 87 cents to 5.25, or 20%; Seagate Technology PLC (STX) 4.39 to 25.53, or 21%; low-priced SNAP INTERACTIVE (STVI.OB) 41 cents to 2.05, or 25%; low-priced Chinese company, Feihe International, Inc. (ADY) 49 cents to 3.34, or 17%; junior oil Warren Resources, Inc. (WRES) 44 cents to 4.00, or 12%; Oncothyreon Inc (ONTY) 75 cents to 7.56, or 11%; and Rosetta Stone Rosetta Stone, In (RST) 75 cents to 8.55, or 9.6%.

Also, BroadVision, Inc. (BVSN) was up another 4.32 to 28.25, or 18%, on nearly 1.5 million shares traded today, Cytec Industries Inc. (CYT) gained 7.35 to 57.21, ManpowerGroup (MAN) 5.75 to 45.86, Aspen Technology Inc. (AZPN) 2.27 to 20.28, and Fuel Systems Solutions, Inc. (FSYS) 2.40 to 23.24.

Whirlpool Corp. (WHR), which we traded today, jumped 7.32 to 61.64, or 13%, on 13 million shares.

OmniVision Technologies Inc. (OVTI) was up 1.36 to 14.67, VanceInfo Technologies Inc. (VIT) up 1.20 to 13.77, AOL Inc. (AOL) 1.55 to 17.76, Focus Media Holding Ltd. (FMCN) 1.97 to 21.97, Marathon Petroleum Corporation (MPC) 3.66 to 41.88, Universal Display Corp. (PANL) 3.87 to 45.98, Polypore International Inc. (PPO) 3.22 to 41.30, Fortinet Inc. (FTNT) 2.23 to 25.04, and Amylin Pharmaceuticals, Inc. (AMLN) 1.29 to 15.53.

There were many other gainers, too many to mention all of them, as it was one of those days where the vast majority of stocks we watch did well.

Large-cap stocks had a great day as well. Netflix, Inc. (NFLX) was up 2.77 to 122.97, Onyx Pharmaceuticals Inc. (ONXX) snapped back 1.04 to 41.98, and Goldman Sachs (GS) was up 1.98 to 113.45, snapping back early, leading the financials higher.

Ultra-long Direxion Daily Financial Bull 3X Shares (FAS) was up 3.70 to 83.06, and the Direxion Daily Small Cap Bull 3X Shares (TNA) up 3.54 to 58.31.

Stepping back and reviewing the hourly chart patterns, after a big gap and a brief pullback, the indices roared ahead all day until early- to mid-afternoon when they finally backed and filled, topped, and then rolled over only to bounce slightly into the close. They closed with solid gains today, but disappointingly, substantially off the highs for the day.

We’ll see if there’s any downside follow-through. One of the things about today’s action on the S&P 500 is that they reached 1333.50, just a couple points off the rally high of a couple weeks ago. So, there is a double-top resistance in this zone.

We’ll have to see what consequences that may have on the levels on the S&P 500 at 1320 and 1300, and on the NDX, the levels are 2482 and 2474. Those are the key levels to watch right now.

Harry Boxer is a technical consultant to many Wall Street hedge funds and large institutional traders, and author of TheTechTrader.com.