Three Keys To Monday’s Rally

September 16, 2002
Daniel Beighley

Price action on the major
indexes dropped off in early trading, though managed to establish up trends by
11:00 a.m. ET that lasted into the close. Trading was light due to the Jewish
holiday Yom Kippur.

The major indexes are flirting
with the necklines of head-and-shoulder patterns on their daily charts, and this
week may prove to be a volatile one with earnings from key companies being
released, as well as a Triple Witching session for Friday. Tomorrow Oracle
(
ORCL |
Quote |
Chart |
News |
PowerRating), -4.62% at 9.28, will announce their earnings after the market
close.

U.S. Treasury Bonds
closed up ’10 at 113 ’30.

In economic news, the Commerce
Department reported that business inventories rose 0.4% in July vs. an
expected 0.2% rise.

Volume was light at
959,491,000 on the NYSE, and 1,087,090,000 on the
Nasdaq.

Market breadth was negative,
with NYSE declining issues over advancing issues by a ratio of 1.24, and down
volume over up volume by a 1.27 ratio. Nasdaq declining issues over advancing
issues came in at 1.83, and down volume beat up volume by a 5.01 ratio.

The
VIX
was +3.12 at 40.54. The TRIN
was -1.45 at 1.02.

Stocks in the news:

Investment bank J.P. Morgan
(
JPM |
Quote |
Chart |
News |
PowerRating), -1.49% at 21.71, fell after it was announced that a federal judge
dismissed the company’s claim against insurers to recover $1 billion in losses
related to Enron.

Utility holding company Dominion
Resources
(
D |
Quote |
Chart |
News |
PowerRating), -9.77% at 52.33, reduced its profit estimates for the year
due to higher expenses and plans to issue additional equity.

Insurance company MGIC
Investment
(
MTG |
Quote |
Chart |
News |
PowerRating), -11.82% at 48.70, has lowered its profit estimates for
the third quarter to $1.40 – $1.45 a share from a consensus of $1.58 a share.

Biotech company Genzyme
(
GENZ |
Quote |
Chart |
News |
PowerRating), +8.42% at 19.95, lowered its profit estimates for the third quarter
to $0.26 – $0.28 a share from previous estimates of $0.31 – $0.33 a share. The
company has also lowered its guidance for the year.

Also in the biotech industry, Millennium
Pharmaceuticals
(
MLNM |
Quote |
Chart |
News |
PowerRating), -12.98% at 10.19, was down on news that its
experimental drug to treat Crohn’s disease failed to meet its primary
effectiveness goal in patient testing.

Conglomerate General
Electric
(
GE |
Quote |
Chart |
News |
PowerRating), +3.14% at 27.90, was able to rally despite the
announcement that the SEC is conducting an informal investigation into the
employment and post-retirement agreement of former CEO Jack Welch.

Computer services company
Overture Services
(
OVER |
Quote |
Chart |
News |
PowerRating), +6.48% at 24.34, had its third quarter profit
outlook boosted by USB Piper Jaffray to $0.22 a share from previous estimates of
$0.17 a share.

Defense contractor General
Dynamics
(
GD |
Quote |
Chart |
News |
PowerRating), +4.31% at 86.60, won a US Navy contract worth $3.2 billion
to build six new AEGIS class destroyers.

Three Keys To Monday’s Rally

BUY THE FEAR, SELL THE GREED

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