What Traders Anticipate Next Week

August 9, 2002
Daniel Beighley

Price
action on the major indexes opened down, before grinding higher in
early action and chopping higher into the close. The Dow and S&P 500 closed
positive, while the Nasdaq closed negative. Big gains were made in gold and
silver, with oil service, broker/dealers, banks, and biotechnology also putting
in nice moves to the upside. Leading the losers were computer hardware,
healthcare, networking, and semiconductors.

Business news was sparse on
this thinly traded summer Friday, as speculation is now geared towards the Fed’s
Tuesday meeting, where a rate cut could be announced. The Fed Funds pit at the
Chicago Board of Trade has been trading with a 72% chance of no rate change, vs.
a 28% chance for a 25-basis point cut. If you are interested in calculating how
the Fed Funds are trading in anticipation of the announcement, you can learn how
to

here in our lesson.

U.S. Treasury Bonds were
up 1’19 at 108’20..

In economic news,Â the productivity preliminary
number came in a 1.1% for the second-quarter vs. an expected 0.7%, adding to a
week of generally supportive evidence for an improving economy.

Market breadth was mixed,
with NYSE advancing issues over declining issues by a ratio of 1.98, and up
volume over down volume by a 1.48 ratio. Though, Nasdaq declining issues over
advancing issues came in at 1.33, and down volume beat up volume by a 2.30
ratio. The

VIX was down 0.44 at 39.36. The

TRIN was up 0.08 at 0.79.

Below average volume had the Dow, the S&P 500, and
the Nasdaq all closing above their 20-day moving averages. Semiconductor
Index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating), down 1.62% at 315.84, was unable to take out its
previous day’s range . The Broker/Dealer Index
(
$XBD.X |
Quote |
Chart |
News |
PowerRating), up 2.68%
at 388.66, closed at the top of its range, above its 20-day moving average.

In the data storage sector,
Emulex
(
ELX |
Quote |
Chart |
News |
PowerRating), down 31.80% at 16.10,Â reduced its revenue
outlook for its quarter ending in September to between $68 million and $73
million, from $74.7 million. The leader in the sector, EMC Corp.
(
EMC |
Quote |
Chart |
News |
PowerRating),
down 3.34% at 6.94, was upgraded by First Albany to “buy” from “neutral” based
on market conditions and valuations. Also in the sector, QLogic
(
QLGC |
Quote |
Chart |
News |
PowerRating),
down 8.69% at 35.90, traded lower in sympathy for negative news on
its industry peer Emulex.

Computer maker Dell Computer

(
DELL |
Quote |
Chart |
News |
PowerRating), up 0.03% at 25.60, had its earnings expectations upped by
Merrill Lynch by a penny.

Computer hardware make Sun
Microsystems
(
SUNW |
Quote |
Chart |
News |
PowerRating), up 1.21% at 4.17, released in a filing with the
S.E.C. that it had $5.4 billion in loans outstanding to several former company
executives.

What Traders Anticipate Next Week

BUY THE FEAR, SELL THE GREED

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