Why The Buying May Continue…

August 8, 2002
Daniel Beighley

Buying
pressure hit the markets for the third day in a row, as the major
indexes trended higher throughout the day, and locked in nice gains at the close.
The biggest winners were in oil service, banks, biotechnology, healthcare,
semiconductors, and insurance stocks, with gold and silver and retail the only
sectors in the minus column.

Today’s rally was broad based,
though lower volume took away from the conviction of the move. Meanwhile
volatility came down to its 10-day moving average, while remaining above its
50-day and 200-day averages. So where do go from now? We’re in the middle of
summer, and are showing potential to set up technically to the upside. TM’s

market bias page is a good place to start for indications of future moves,
though always stay alert and aware of our ever-changing environment. Next week,
the Fed will meet to discuss a rate cut.

U.S. Treasury Bonds were
down ’16 at 107 ’01.

In economic news, the producer price index came in
at 0.2% vs. a 0.1% forecast and the core producer price index fell 0.3%
vs. an expected increase of 0.1%. Initial jobless claims for the week were
posted at 376,000 vs. an anticipated 385,000.

Market breadth was positive,
with NYSE advancing issues over declining issues by a ratio of 2.28, and up
volume over down volume by a 3.04 ratio. Nasdaq advancing issues over declining
issues came in at 1.53, and up volume beat down volume by a 3.57 ratio.
The

VIX was down 3.27 at 39.80. The

TRIN was down 0.21 at 0.70.

Average volume led the Dow, the S&P 500, and the
Nasdaq to break through their downward trend lines for closes above their 20-day
moving averages. Semiconductor Index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating), up 4.36% at 321.07,
was halted by its downward trend line, still under its 20-day moving average.
The Broker/Dealer Index
(
$XBD.X |
Quote |
Chart |
News |
PowerRating), up 5.59% at 378.49, was also
halted by its downward trend line, still under its 20-day moving average.

Discount giant Wal-Mart
(
WMT |
Quote |
Chart |
News |
PowerRating), up 1.67% at 49.19, announced that its same store sales increased 4.5
percent for July, and said that it expects to meet or beat its second-quarter
earnings projections.

Electronic retailer
Best Buy (BBY),
down 36.52% at 19.55, put a dent in the sector after it announced that it cut
its earnings estimates toÂ profits of 17 cents to 21 cents a share, from
previous expectations ofÂ 30 cents to 32. Competitor Circuit City
(
CC |
Quote |
Chart |
News |
PowerRating),
down 8.26% at 13.76.

Broadcasting and cable TV company Univision
(UVN),Â
down 8.81% at 19.97, missed its earnings expectations by a penny with profits of
9 cents a share. Also in the sector, Cablevision
(
CVC |
Quote |
Chart |
News |
PowerRating), down 15.81%
at 6.60, fell after it said it will lose subscribers for 2002.

Clothing retailer
Gap
(
GPS |
Quote |
Chart |
News |
PowerRating), up 0.08% at 11.16, reported
that comparable sales for July were down 8 percent, though also said it expects
to meet its second-quarter profit targets.

Also in the clothing retail business, Talbots
(TLB),
up 7.47% at 28.62, raised its earnings guidance by 1 cent to 3 cents vs.
previous estimates of 30 cents a share. And AnnTaylor (ANN),
up 9.24% at 26.36,Â raised its earnings guidance by at least 7 cents to 38 cents
a share.

Telecom stock Qwest Communications
(
Q |
Quote |
Chart |
News |
PowerRating), unch at 1.20, posted better
than expected earnings results, though lowered its forecasts for the full year.

Why The Buying May Continue…

BUY THE FEAR, SELL THE GREED

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