How Long Will It Last?
Whether the day’s rally was yet another bear trap or a sign that the market
may see an extended rally remains to be seen, but at least for Tuesday, the
market launched into a broad-based rally as volume on the Nasdaq and S&P 500
surged more than 30% above Monday’s levels.
Semiconductors, Internets, and software companies powered the Nasdaq 6.0%
rise, while the Dow and S&P each added 2.6% thanks to strength in
financials, telecom, and cyclicals. Even biotechs showed courage.
Nasdaq volume was 2.19 billion shares, and NYSE volume was 1.34 billion
shares. Traders will be watching closely to see if volume can remain robust as
share prices climb higher. Bad earnings news, however, could easily spoil the
party.
“The wild gyrations of the past week have produced a flurry of whipsaws
within the very sensitive stochastic indicators, and in our conventional
short-term signals,” said Paul Desmond, President, Lowry’s Reports.
“We noted last week that longer-term investors should view any short
term rallies occurring during periods in which the primary trend of the market
is negative, as it is now, often prove to be better opportunities for selling
into strength than for new purchases,” he added.
Top sectors included semiconductors
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up 8.3%, and broker/dealers
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On the down side were drugs
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down 0.5%.
Tech screamers included Ciena
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Networks
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up 16%.
In the big caps, Sun Microsystems
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average volume.
Dow winners were J.P. Morgan
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6.9%, Intel
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Looking ahead, the March Producer Price Index report will be released
Thursday at 8:30 AM ET, and analysts look for a 0.1% increase in the PPI and the
PPI core rate.