Day Trading

The S&P 500 surged early, and the market made new highs in some strong
institutional
stocks, with EMC (EMC), Gap (GPS), Best buy (BBY), America Online (AOL), Amgen (AMGN), and
Worldcom (WCOM) leading the way.

We got our new high close in
the S&P 500 yesterday, thanks to a flurry of
Dow Jones news “raps” late in the day by Greenspan, his cronies, and the ever-present Bob Rubin.

The Dow closed at an all-time high of 9736.08 on Friday, up
268.68 on the day. Six stocks–IBM, AXP, MCD, WMT, UTX, and T–accounted for 46 percent of the
move.

Yesterday was almost a replay of Wednesday’s action, when the Mysterious
Futures Man showed up at 3:30 p.m. to close the S&P 500 cash right at its 50-day moving average.

After some early enthusiasm yesterday, with the S&P futures dictating the
NYSE opening once again, the SPDRs traded below their 50-day moving average, made one attempt to
rally above the early morning high of 123.56, failed, and sold off to a low of 121.81.

The S&P 500 tried to reach daylight with its run from
11:00 a.m. to 12:45 p.m. yesterday, but it turned on a dime to close below its 50-day
moving average (1227.82) at 1225.50.

With the Dow, NASDAQ, Russell 2000, S&P Midcap, and Dow
Transports all
finishing up yesterday, and with decent action in the financials, it looks like the market is
trying to make a move to the upside.

Friday’s debacle in stocks like Micron Technology (MU) and
Compaq (CPQ)
certainly demonstrate why you shouldn’t carry tech stocks overnight unless you hold puts or
have some other option strategy in place.

It’s the last trading day of the month. As of yesterday’s close, the S&P
cash was up 1.3 percent on the year. A program rally kicked in from 1:00-4:00 p.m. eastern time
yesterday, but the move didn’t appear to have much institutional support.

Back to the high end of our 1999 trading range. The
institutions stuck to their usual game plan and came for the techs, drugs, and specialty
retailers again–it’s the only
way they can hope to keep up with the S&P 500. At least it makes stock selection easy, as
evidenced by the multi-point moves in many of yesterday’s names.