Pre-Holiday Tradition Disappoints

So much for holiday traditions. The one that says the stock market goes up on the day before Thanksgiving turned out to be a turkey, as stocks started the day down and stayed down.

The ISDEX was down fractionally to 174, and the Nasdaq dropped 5 to 1875. The S&P 500 lost 5 to 1137, and the Dow declined 66 to 9834. Volume declined to 1 billion shares on the NYSE, and 1.5 billion on the Nasdaq. Decliners led 18 to 12 on the NYSE, and by a few shares on the Nasdaq.

Microsoft fell 1.37 to 64.03 on news that executive vice president and general counsel William Neukom will step down after 22 years. There were also reports of slowing XP sales. The stock broke its uptrend and gave a MACD sell signal (see commentary at end).

Chip stocks were strong, bouncing on a better than expected equipment book-to-bill after five straight down days. Broadcom , Applied Materials , Novellus , and Xilinx were among the winners.

Triquint fell 12% on earnings concerns, and Analog Devices slipped 1% on a warning.

Some technical comments on the market: Note: We include charts in the technical market commentary. If you can’t get the charts via the e-mail newsletter version, try this link:

Note – The Market Close and technical commentary will return after the close on Monday. Happy Thanksgiving.

Another day, another breakdown – and this one in Microsoft (first chart), which gapped down out of a bearish rising wedge and gave its first MACD sell signal since the rally began. That breakdown gives the stock downside potential to its September lows or lower, but downside volume will have to pick up to make that happen. The SOX (second chart), the semiconductor index, tested yesterday’s breakdown out of a rising wedge. A strong gain above 510 on Friday could give the bull new life. The Nasdaq (third chart) clearly broke its October 31 trendline today. First support is 1053, second support is 1840, and critical support is the 1780-1820 range; that’s where the bulls need to make a stand. First resistance is that broken trendline around 1910 for Friday. The Dow (fourth chart) fell back inside its broadening top upper trendline, which should now be first resistance at around 9875-9900 on Friday. First support is 9800 and then 9750. Critical support is just above 9500. The S&P (fifth chart) has support at 1130-1135, and resistance at 1142-1148, 1155 and 1160-1164. Critical support is just above 1110.

Special report: For a free introduction to technical chart patterns and an overview of last year’s action in the stock market, visit,1785,2571_500051,00.html.

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