High-Octane Bounce!

March 13, 2001
Daniel Beighley

Whether it was merely a bounce from
oversold levels or short covering, tech stocks staged a vibrant 4.7% bounce
Tuesday off of Monday’s 27-month low close. The rally also spread out to include
the blue chips, which engineered a 0.8% gain in the Dow and a 1.5% gain in the
S&P 500.

Stocks got a boost from some signs of
a slowing economy. Retail sales fell 0.2% for the month which was lower than the 0.2% increase
analysts had expected. What confused markets, though, was an upward revision in the January report from a 0.7% increase to 1.3%.

Volume picked up on the NYSE by 30% as
1.4 billion shares changed hands, and volume remained healthy on the Nasdaq as
2.1 billion shares traded.

"You can still count me in as
being a bear although we are starting to see some signs that signal a
capitulation that could lead to some kind of market rally, perhaps even a strong
one," said Peter Eliades, President, StockMarketCycles.com.

The Arbs index yesterday was up to
3.42 according to my calculations, and that’s a really high number. It’s not
surprising to see markets reach some kind of bottom around those levels.
Sometimes they are important bottoms, but I don’t think this one is going to be
an important one," he added.

According to preliminary numbers, the
Nasdaq gained 91.31 to 2014.69, the Dow added 81.58 to 10,289.83, and the
S&P 500 rose 17.38 to 1197.54.

Looking ahead, the January business
inventories report will be released at 8:30 AM ET, and analysts expect them to
have remained unchanged. Due out Friday are the much-anticipated University of
Michigan consumer sentiment numbers.

High-Octane Bounce!

BUY THE FEAR, SELL THE GREED

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