What This Key Reversal Day Means…

October 10, 2002
Daniel Beighley

Bulls
snapped the Bears’ selling streak today, as buying pressure launched
the major indexes to impressive gains. After breaking below key technical
support on the S&P 500, price action came roaring back to the upside, with
technology leading the charge. Though today can be considered a key reversal
day, from the intermediate-term perspective it means nothing until endorsed by
heavy volume beginning three days from today. This will give evidence of
institutional sponsorship to the upside.

In economic news, initial
jobless claims came in at 384,000 vs. an expected 405,000; but be sure to
read Tony
Crescenzi, as the number could be a fluke.

U.S. Treasury Bonds
closed -28 at 113 ’24.

The dollar was unchanged
at 107.60.

Volume was well above
average at 1,999,306,000
on the NYSE, and 1,827,954,000
on the Nasdaq.

Market breadth was positive,
with NYSE advancing issues over declining issues by a ratio of 1.60, and up
volume over down volume by a 4.13 ratio. Nasdaq advancing issues over declining
issues came in at 1.56, and up volume beat down volume by a 6.49 ratio.

The
VIX
was -3.19 at 46.29. The TRIN
was -0.65 at 0.38.

Stocks in the news:

Internet portal Yahoo!
(
YHOO |
Quote |
Chart |
News |
PowerRating),
+2.94% at 12.27, beat its third-quarter earnings estimates by a penny, with
profits of $0.05 per share, and has raised its 2003 outlook.

Compuer services company
Overture
(
OVER |
Quote |
Chart |
News |
PowerRating), +12.45% at 27.08, had its estimates raised by Goldman
Sachs to $1.19 per share from$1.14 per share based on Yahoo!’s strong revenue
report.

Software company Electronic
Arts
(
ERTS |
Quote |
Chart |
News |
PowerRating), +2.80% at 66.60, had its earnings estimates raised by
SoundView for 2003 to $2.10 a share from $2.05 a share.

Conglomerate General
Electric
(
GE |
Quote |
Chart |
News |
PowerRating), +2.72% at 22.60, was downgraded by Merrill Lynch to
“neutral” from “buy” as it cut its fourth-quarter and 2003
estimates.

Oil services company Cooper
Cameron
(
CAM |
Quote |
Chart |
News |
PowerRating), +4.03% at 41.48, issued an earnings warning for
its third-quarter, with new estimates for $0.37 per share vs. the Multex
consensus of $0.39.

Retailer Costco
(
COST |
Quote |
Chart |
News |
PowerRating),
+5.74% at 32.20, beat its third-quarter earnings expectations by $0.03, with
profits of $0.52 a share.

Medical supplies company Bausch
and Lomb
(
BOL |
Quote |
Chart |
News |
PowerRating), +6.46% at 29.80, announced that it expects its
third-quarter per share earnings to beat expectations by 10%.

Computer security company Network
Associates
(
NET |
Quote |
Chart |
News |
PowerRating), +25.11% at 10.76, posted better-than-expected
third-quarter earnings.

Software maker Microsoft
(
MSFT |
Quote |
Chart |
News |
PowerRating), +5.43% at 46.38, rallied after receiving negative comments from
CSFB, which lowered the company’s fiscal 2003 earnings.

Insurance company Aetna
(
AET |
Quote |
Chart |
News |
PowerRating), +16.12% at 36.80, said that it expects its earnings to double for the
third-quarter due to improved margin results. Bear Stearns also upgraded the
stock to peer perform” from “under perform.”

Biotech company Genetech
(
DNA |
Quote |
Chart |
News |
PowerRating), -2.88% at 30.96, announced third-quarter earnings in-line with
expectations, though was downgraded by SG Cowen to “market perform”
from “market perform.”

From TM’s Momentum List,
insurance company Renaissancere Ltd.
(
RNR |
Quote |
Chart |
News |
PowerRating), +6.37% at 40.90.

What This Key Reversal Day Means…

BUY THE FEAR, SELL THE GREED

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