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A little firmer, with a test of S1

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Stocks have firmed from their lows and we've actually seen the NASDAQ-100 Index (NDX.X) 1,076.40 -1.68% and the NASDAQ-100 Tracking Stock (AMEX:QQQ) $26.79 -1.07% catch a bit of a bid from their S2 levels and test today's S1 levels, which on a short-term basis would be considered intra-day resistance.

Just as this morning's selling at the open looked to be technically driven, it would be a reach to think that the firming at today's S2s and slight bid coming into the major indexes in the latter half of trade isn't technically driven too.

Sector action remains negative, but we have seen the Disk Drive Index (DDX.X) 81.64 +0.03% just now turn green, while today's sector loser in the Semiconductor Index (SOX.X) 326.10 -3.15% remains the sector loser, but has also firmed off its lows of 322.22 earlier today. If you're an active Semiconductor HOLDRs (AMEX:SMH) $24.82 -2.47% trader on a daily basis, then it might be interesting to plug in the daily, weekly and monthly high ,low, closes for this security and begin testing pivot analysis with this security.

While stocks see a slight bid come in as the session winds down, Treasuries actually saw a bit of late session selling into their close, and perhaps inversely "mimics" what we're noting in equities late this afternoon. The 10-year Treasury March futures (ty03h) 113'105 +0.10% finished up on the session, but well off its highs of 113'220 at its mid-day high. The benchmark bonds YIELD ($TNX.X) fell to 4.072% at its 03:00 PM EST close.

Late yesterday afternoon I didn't think the NYSE or NASDAQ could reach Monday's volume levels, but by session's end, they were closely matched. Today's volume is almost identical to yesterday's if not a little heavier today with NYSE volume now at 1-billion shares (yesterday's total was 1.36), while NASDAQ currently has 1.4 billion shares trade, which is going to press yesterday's volume of 1.54 billion shares.

Daily breadth has been negative and currently has NYSSE decliners outnumbering advancers by a 3 to 2 margin, while NASDAQ breadth is negative at 19:11, or close to 2:1.

The new highs versus new lows is somewhat impressive considering today's 1% declines in the major indexes. The NYSE shows 79 stocks having traded a new 52-week high compares to 13 stocks hitting new lows (yesterday's final was 92:19). NASDAQ is just about equal to the NYSE in this category, with investors pushing 74 stocks to new 52-week highs compared to 20 stocks hitting new 52-week lows and if anything, creating an observation of BULLISH divergence as yesterday's final was 69:15 for this indicator. I say "BULLISH" divergence as a negative trading day still has 74 stocks trading new 52-week highs, compared to a more bullish trade yesterday, which saw 69 stocks achieving a 52-week high.

Jeff Bailey

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