Another Friday Afternoon Swoon

In what has become a familiar pattern for the market lately, stocks gave back strong gains Friday afternoon as traders worried about the possibility of war and terrorist attacks liquidated long positions ahead of the weekend.

The ISDEX lost 1 to 119, and the Nasdaq fell 16 to 1615. The S&P 500 gained 2 to 1067, and the Dow added 13 to 9925. Volume was unchanged at 1.24 billion shares on the NYSE, but rose to 1.66 billion on the Nasdaq, yet another ‘distribution day’ for technology stocks. Advancers led 19 to 12 on the NYSE, and 17 to 16 on the Nasdaq.

Micron estimate cuts by Lehman late in the day also weighed on tech stocks.

Palm fell 25% on a warning.

Ciena , EMC and Corning hit new 52-week lows.

Oracle fell on concern about the company’s results. Today was the last day of Oracle’s quarter, and the company reports June 18.

i2 gained on optimism that the company could be acquired or announce an alliance.

Brocade climbed 2% ahead of an analyst meeting on Monday.

Apple Computer fell on cautious comments from Morgan Stanley.

Some technical comments on the market: Note: To see the charts in the text email newsletter, click on the story link at the top of the newsletter.

After yet another ugly day in the market, the possibility of a ‘June swoon’ for stocks is looking better and better. The indexes are unable to take out the slightest resistance, and are met with selling when they do. The biggest support for the market at the moment is 9800 on the Dow (first chart below). Below that level a giant head and shoulders top comes into play with downside potential to 8800. Resistance on the Dow is 10,078 and 10,150; it is unlikely that the Dow will clear that resistance. The S&P 500 (third chart) tried to climb back into a bear flag today but failed. 1072-1078 is very tough resistance, and 1049 was the recent low on the index. The Nasdaq (fourth chart) has support at 1600 and resistance at 1640 and 1650, where it turned back today. About the only good news is that Monday is the first day of the month, which is almost always an up day.




Special report: For a free introduction to technical chart patterns, visit,1785,2571_500051,00.html.

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