Why This May Be A Key Reversal Day

April 7, 2003
Daniel Beighley

After
a huge gap up on positive war news, the major indexes then entered a
decline and closed at the lows of the day. Volume was strong, giving the
indication of a key reversal day. Many are now speculating the possibility of a
“buy the war, sell the peace” scenario, as it appears Saddam Hussein is no
longer in control of Baghdad. The market leading semiconductors and
broker/dealers also closed at their daily lows, though overall breadth was
slightly positive.

In economic news, consumer
credit came in at $1.5 billion vs. expectations of $3.0 billion.

The Ten Year NoteÂ was
-140 at 113 220.

The US dollar was +0.60
at 101.48.

Volume was average,
with the NYSE coming in at 1,431,035,000 and the Nasdaq at 1,500,942,000.

Market breadth was positive,
with NYSE advancing issues over declining issues by a ratio of 1.58, and up
volume over down volume by a 1.73 ratio. Nasdaq advancing issues over declining
issues came in at 1.54, and up volume beat down volume by a 1.73 ratio.

The

VIX was -1.07 at 31.73. The

TRIN was -0.14 at 0.91.

Strongest in the Dow were:

Stocks in the news:

Aluminum giant Alcoa
(
AA |
Quote |
Chart |
News |
PowerRating),
+7.93% at 21.63, has beat its first-quarter earnings expectations by $0.03 with
profits of $0.23 per share.

Food processing company
Bunge Limited
(
BG |
Quote |
Chart |
News |
PowerRating), +3.71% at 25.70, raised its earnings guidance due to
strong performance across its business, especially in South America.

Retailer JC Penney
(
JCP |
Quote |
Chart |
News |
PowerRating),
-2.16% at 19.85, said that it expects same store sales to be flat for the month.

Media company AOL Time
Warner
(
AOL |
Quote |
Chart |
News |
PowerRating), +5.28% at 12.16, was upgraded by Morgan Stanley to
“overweight” from “equal weight”.

Home improvement retailer
Home Depot
(
HD |
Quote |
Chart |
News |
PowerRating), -0.37% at 26.33, had its estimates raised by Bank of
America Securities due to progress made.

Online company Yahoo!
(
YHOO |
Quote |
Chart |
News |
PowerRating),
-0.20% at 24.00, had its first-quarter estimates raised by Goldman Sachs by
$0.01 to $0.07 per share.

Software company Siebel
Systems
(
SEBL |
Quote |
Chart |
News |
PowerRating), +3.09% at 7.99, lowered its first-quarter revenue
guidance $330-335 million vs. a consensus estimate of $369.16 million. The
company attributes the setback to customers postponing orders beyond the
quarter.

Chemical manufacturing company Air Products
(
APD |
Quote |
Chart |
News |
PowerRating),
-0.14% at 42.61, lowered its earnings guidance to $0.51-0.54 vs. a consensus
estimate of $0.56.

Electronic instruments and
controls company Jabil Circuit
(
JBL |
Quote |
Chart |
News |
PowerRating), +0.96% at 18.88, has been
upgraded by Needham to “strong buy” from “buy”.

Homebuilder KB Home
(
KBH |
Quote |
Chart |
News |
PowerRating),
-0.34% at 46.59, was downgraded by CSFB to “underperform” from “neutral”.

Truck manufacturer PACCAR
(
PCAR |
Quote |
Chart |
News |
PowerRating), -1.89% at 53.85, was been downgraded by Prudential to “hold” from
“buy”.

Food processor Kraft Foods
(
KFT |
Quote |
Chart |
News |
PowerRating), +0.87% at 28.75, was given a negative mention in Barron’s over
the weekend in an article which claims it may suffer from obligations of Altria,
which owns 50% of the company.

danielb@tradingmarkets.com

Why This May Be A Key Reversal Day

BUY THE FEAR, SELL THE GREED

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