Stealth Rally

August 23, 2000
Daniel Beighley

After a weak opening, Internets, big-cap techs, and chip-makers helped ignite
a surprising Nasdaq rally that took the average up 1.3% for the day, putting it back above
4000 for the first time since July 25. In addition, the Nasdaq is back above its
200-day moving average by a constructive 50 points. Strength in oils and drugs
added some breadth to the day’s rally, as the S&P 500 rose 0.5% while the
Dow managed to rise just a fraction.

Volume picked up marginally from Tuesday’s levels, with 1.45 billion shares
trading on the Nasdaq and 864 million shares trading on the NYSE. Traders
commented on the general lack of conviction the market has been displaying over
the past few weeks, and many are simply waiting for the majority of market
participants to return after Labor Day.

"You think in terms of where we had been up until March, and then we had
the really big decline, and I think people have been wondering where we’re going
to get new leadership in the market. I think that has been sort of the
underlying problem we’ve had lately," said Richard
Dickson, Chief Technical Analyst, Scott & Stringfellow.

"Either we’ve had attempts to go into some of the value stocks, attempts
to go into capital goods, or attempts to go in to staples stocks. And we’ve also
had the energy stock rally and we’ve also gone into the finance stocks. I think
there’s still enough uncertainty out there that we’re just not seeing a real
conviction in the financials that I think we need to really push this thing
higher," he added.

According to preliminary numbers, the Nasdaq jumped 52.79 to 4011.01, the
S&P 500 gained 7.84 to 1505.97, and the Dow added 5.50 to 11,144.65.

Looking ahead, the July durable goods orders will be released Thursday at 8:30 AM ET. Street consensus looks for a 7.7% decrease in new orders.

Stealth Rally

BUY THE FEAR, SELL THE GREED

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