Before You Take A Position, Consider This

March 17, 2003
Daniel Beighley

Buyers
took control today as the major indexes chalked up impressive gains
for the session. Price action made most of the gains in the morning after it
became clear that President Bush would give Saddam Hussein one final opportunity
to step down as Iraq’s leader, or face military attack. Today’s broad-based
rally was led byÂ technology issues, with broker/dealers and retail also
advancing nicely. Market breadth put in a hugely positive session with up volume
beating down volume by over 10 to 1.

As discussed in TM’s Blueprint
For Trading The War With Iraq, traders who have a longer-term outlook should
wait for the dust to settle before taking a position. This would be considered
more risk averse as an identifiable trend can be played.

The only declining sector was gold
and silver
(
$XAU.X |
Quote |
Chart |
News |
PowerRating), -1.03%.

There were no economic releases
for today.

The Ten Year Note
(
TYH3 |
Quote |
Chart |
News |
PowerRating) was -230 at 114 175.

The US dollar
(
DXH3 |
Quote |
Chart |
News |
PowerRating) was +10.80 at 101.31.

Volume was above
average, with the NYSE coming in at 1,657,497,000 and the Nasdaq at
1,856,641,000.

Market breadth was positive,
with NYSE advancing issues over declining issues by a ratio of 2.65, and up
volume over down volume by a 12.98 ratio. Nasdaq advancing issues over declining
issues came in at 1.98, and up volume beat down volume by a 11.20 ratio.

The
VIX
was +0.13 at 36.46. The TRIN
was -0.90 at 0.20.

Biggest Dow gainers were:

Stocks in the news:

Drug maker Isis Pharmaceutical
(
ISIS |
Quote |
Chart |
News |
PowerRating), -31.97%
at 2.83, sold off on news that its experimental cancer treatment failed to meet
its late-stage testing goals.

In the chip sector, Salomon Smith Barney lowered its
estimates on Micron Technology
(
MU |
Quote |
Chart |
News |
PowerRating), +2.29% at 8.03, as the stock
under-performed its sector.

Discount retailer Dollar
General
(
DG |
Quote |
Chart |
News |
PowerRating), +15.87% at 12.48, announced that its fourth-quarter
earnings by $0.01 with profits of $0.33 per share. Earnings were up 11% from a
year ago, and expects earnings for the year to be up 11-15%.

Also in the discount retail
biz, Wal-Mart
(
WMT |
Quote |
Chart |
News |
PowerRating), +5.28% at 51.97, announced that it expects same–store
sales for April to rise in the low single digit percentage rate.

Discount broker Charles
Schwab
(
SCH |
Quote |
Chart |
News |
PowerRating), +12.29% at 7.49, is up after announcing it plans to buy
back $250 million in company stock.

Computer services company CACI
International
(
CAI |
Quote |
Chart |
News |
PowerRating), -2.59% at 30.75, sold off after reaffirming its
outlook for 2003 claiming their fundamentals are strong.

Biotechnology company Cardinal
Health
(
CAH |
Quote |
Chart |
News |
PowerRating), +6.85% at 53.76, has been upgraded by Bear Stearns to
“outperform” from “peer perform.“

Textile company Mohawk
(
MHK |
Quote |
Chart |
News |
PowerRating),
-4.43% at 45.04, has lowered its first-quarter earnings guidance to $0.60-0.63
per share vs. a consensus of $0.82.

Computer services company PEC
Solutions
(
PECS |
Quote |
Chart |
News |
PowerRating), -37.59% at 9.86, has lowered its earnings guidance
for the first-quarter and full year due to expected delays in government
contracts. The stock has also been downgraded by JP Morgan to
“underweight” from “neutral.”

Salomon Smith Barney has
downgraded the tobacco sector to “underweight” from
“market-weight” due to a potential negative outcome on a lawsuit
against Altria. Altria
(
MO |
Quote |
Chart |
News |
PowerRating), -0.60% at 34.72, has had its price target
cut to $39 form $48, and Lowes Carolina
(
CG |
Quote |
Chart |
News |
PowerRating) has been downgraded to
“in-line” from “outperform.“

Defense contractor Lockheed
Martin
(
LMT |
Quote |
Chart |
News |
PowerRating), +3.89% at 46.65, has won a $4.1 billion military contract
from the Pentagon to build 60 C-130J aircraft.

Restaurant company Wendy’s
(
WEN |
Quote |
Chart |
News |
PowerRating), -0.92% at 25.80, has been downgraded by Salomon Smith Barney to
“in-line” from “outperform.“

Also in the restaurant
business, Brinker International
(
EAT |
Quote |
Chart |
News |
PowerRating), +6.07% at 31.10, has been
upgraded by Salomon Smith Barney to “outperform” from “in-line.“

danielb@tradingmarkets.com

Before You Take A Position, Consider This

BUY THE FEAR, SELL THE GREED

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