Upside Framework

May 1, 2002
Paul Letourneau

At the opening bell,
the markets did not resume
the rally that was dominant yesterday. The market averages were weaker, with the
Dow Jones Industrial Average
(
$INDU |
Quote |
Chart |
News |
PowerRating) slipping into negative territory.
The markets then dropped further when the worse than expected economic data
triggered a sizeable downside slide. The April ISM Index fell to 53.9% from
55.6% in March; this is worse than the 55.0% consensus. Construction Spending
fell 0.9% in March, much weaker than the -0.1 consensus. The pre-market outlook
had been hopeful that yesterday’s slightly bullish Consumer Confidence data
would be followed by another positive economic report. Watching the charts will
be key, so it is imperative to read

Kevin Haggerty’s Views From the Trading Desk.
Mr. Haggerty has laid out the
upside framework to be ready for intraday setups and resistance at the key
levels.

Credence Systems (CMOS)
traded 100% of its average volume before 1:00 PM. Credence moved down sharply
this morning and is now forming a little bear flag on the 5-minute chart. CMOS
is coming into some chart resistance intraday, as well as 20-MA resistance
intraday. Volume has dried up like a desert lake. This stock may offer some
short possibilities for nimble scalpers. As always, wait for confirmation (in
this case, the break of the current up trendline on the 5-minute chart).

Phillip Morris
(
MO |
Quote |
Chart |
News |
PowerRating) was called to my
attention by a triple 9s to sell, but the tobacco stocks appear to have some
strength on the day.
(
RJR |
Quote |
Chart |
News |
PowerRating) has made a 52-week high today, and both of these
stocks are forming ascending triangles intraday. Both may offer some intraday
scalps (experienced only, as these two can have spotty volume at times). MO has
taken off as I write, so watch RJR.

Upside Framework

BUY THE FEAR, SELL THE GREED

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