A Leading Indicator To Watch For Tomorrow

August 21, 2002
Daniel Beighley

Price action
on the major
indexes was dizzying today as it shot up off the opening bell, sold
off to the day’s lows at 11 am ET, put in a strong rally to the day’s highs by 2
pm ET, then sold off again before another mild rally into the close. In the end,
all three indexes were positive. Leading the action were airlines, networking,
semiconductors, and telecoms, with gold and silver and insurance the only
sectors in the red.

The summer continues to deliver
volatility, as the S&P 500 made sizable moves within a 20 point range. In his
column today

Tony Saliba cited volatility as a leading indicator to watch, so be sure to
see which way TM’s

market bias is pointing for future market direction.Â

U.S. Treasury Bonds were
down ’09 at 109 ’25.

There were no economic releases today. Tomorrow initial
jobless claims will be released at 8:30 am ET.

Market breadth was positive,
with NYSE advancing issues over declining issues by a ratio of 2.21, and up
volume over down volume by a 3.54 ratio. Nasdaq advancing issues over declining
issues came in at 2.05, and up volume beat down volume by a 6.36 ratio.
The

VIX was down 0.93 at 31.63. The

TRIN was down 0.20 at 0.79.

Below average volume closed the Dow, the S&P 500,
and the Nasdaq near the top of their daily ranges, and above their 50-day moving
averages. The Semiconductor Index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating),
up 4.65% at 361.77, displayed strength by closing at the top of its daily range
at its 50-day moving average, and also was able to shake off negative news.

Electronics retailer Radio
Shack (RSH),
down 16.37% at 24.21, guided below its third-quarter guidance, and now sees
earnings between $0.23 and $0.26 vs. a consensus of $0.33.

In the retail sector Big
Lots (BLI),
down 1.42% at 17.25, beat its second-quarter earnings expectations by 3 cents
with profits of 3 cents a share,
BJ’s Wholesale Club Inc.
(
BJ |
Quote |
Chart |
News |
PowerRating), down 0.18% at 26.65, was downgraded by UBS
Warburg to “hold” from “buy” based on industry and execution concerns, also
Talbots
(
TLB |
Quote |
Chart |
News |
PowerRating), up 2.75% at 33.20, beat second-quarter earnings
expectations.

Tobacco company Phillip
Morris
(
MO |
Quote |
Chart |
News |
PowerRating), down 2.12% at 50.60, dragged the Dow down after negative
comments form Goldman Sachs who claimed litigation concerns will continue to
keep earnings down in the future.

In the semiconductor business,
Intel
(
INTC |
Quote |
Chart |
News |
PowerRating), up 3.11% at 19.56, had its third-quarter revenue and
2002 earnings estimates reduced by SG Cowen, who cited no evidence of a
back-to-school pickup in demand.Â

A Leading Indicator To Watch For Tomorrow

BUY THE FEAR, SELL THE GREED

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