The indices had not only a strong day but a significant day. The indices closed near the highs for the session and near the highs for the last few weeks.
The day started out with a very narrow sideways movement on Nasdaq, and a slightly downward movement on the S&P 500, but it was fairly shallow. Just before lunch hour the market rallied strongly to new session highs, and tested Monday’s reaction highs. Then in the afternoon after another 2-hour consolidation, the market powered ahead and soared into the close. Only a last 5-minute pullback even edged it off the highs, but it closed very near the highs for the session.
The Dow was up 84 ½, the S&P 500 up nearly 10, the Nasdaq 100 up just under 19, and the Composite up nearly 27. The SOX index was up another 10 points, or 2 percent, and that powered Nasdaq.
The technicals confirmed the advance today. Advance-declines on New York were 22 ½ to 10 positive. Nasdaq was 2 to 1. Up/down volume was a very solid 4 to 1 positive on the NYSE with a total of about 1.4 billion traded. Nasdaq traded about 1 ¾ billion, with 1 ½ billion of it to the upside, a 5 to 1 ratio. So a very positive day on Nasdaq.
Reviewing TheTechTrader.com trading board, a new stock we traded today, OSUR, exploded on an FDA approval up 1 ¾ today, on 15 ½ million shares. Other highlights included Alvarion, which powered ahead, testing 14 before backing off. It closed up 94 cents.
Navarre, continuing its solid move this year, was up another 58 cents. Some others of note in the lower-priced sector were ATRM up 40 cents, ATEA up 65 cents, and CVTX in the biopharm sector up 40 cents. Nanogen snapped back 42 cents, and OVTI was up 56 cents. But the significance there was that after the close OVTI announced solid earnings, and as this is written, the stock is trading up about 2 ½ points on the day on heavy volume.
Stepping back and reviewing the overall pattern, today was a significant day in that the entire pattern of the last 3 weeks, which could have been a top formation, has now been confirmed as a consolidation formation because it broke out to the upside, taking out declining tops lines.
Nasdaq at the high today reached the June 7 highs. The S&P 500 slightly exceeded that and is near a test of the April 26 highs. So we’re near the highs for the last 2 months on the S&P 500, and similar to that on the Nasdaq 100.
The entire pattern appears to be a head-and shoulders bottoming-type pattern over the last 2 ½ months on Nasdaq, with a strong neckline between 1498 and 1505, in that zone. So the next day or two will be very telltale in terms of the near-term direction of the market, but right now it sure looks like we’re headed higher.
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