Market Remains Choppy And Vulnerable

February 10, 2003
Dave Landry

On Monday, the Nasdaq opened firmer but soon began to
slide. It found its low by mid-morning and began to rally. Then after some
sideways back-and-forth, it rallied againÂ late in the day. This action has
it closing well.Â

The S&P put in a somewhat similar performance. It
remains just below its recent trading range.

So what do we do? Nothing much has changed. The market
remains choppy and has a general downward bias. This is evidenced in the indices
(Monday notwithstanding) and, as mentioned recently, throughout many sectors. Therefore, continue to focus on the short
side but keep it light since we remain in an event driven environment. Once
again, be patient, there could be an opportunity to get more aggressive on a continued
breakdown followed by a pullback (and ideally timing signals).

Looking to potential setups,Â Fifth Third Bancorp
(
FITB |
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PowerRating),
mentioned Friday and in the weak banks (and weaker regional banks–mid-west, plotted below),
still looks
like it has the potential to resume its downtrend out of a pullback.