Wacky Naz

It is simply amazing how much
volatility we see in the market in only the first two hours of trading. I
remember in 1995 when a 60-point move in the Nasdaq across the whole day was
considered “significant.”

This morning we saw the Nasdaq futures
trace out a mini-cup pattern within the first 30 minutes of trading. It then
broke out of this pattern to set a new high, but failed to hold the 3360 level.
It then fell back to retest the morning low and held.

At this point, we should watch — and set
our alerts at — the 3350 level. If you are one who trades the big names that
trend with the futures, then you will want to watch this area. Personally, I
follow the e-minis, in both the S&Ps and Nasdaq. 

Now, as I write this, the Nasdaq
futures have set a new low.

Interestingly, the Nasdaq Composite has not reclaimed its
morning high, suggesting that there is in fact more trouble ahead. While the
futures do lead the market, in my opinion, I do like to see the trend mimicked
by the Comp.

As I noted above, the futures just set a new intraday low, watch
for a filling of the gap from Tuesday, which is a common occurrence. Set your alerts near the 3400 level, which I noted as a troublespot on the 60-minute
charts from yesterday.

Lastly, CMG Inc.
(
CMGI |
Quote |
Chart |
News |
PowerRating)
, a low-level breakout I mentioned
on Wednesday, continued higher, but pulled back to retest its lows. This is why
we must trail out stops.

Until later,

David
Baker