Why Volume Is Key For Bulls

November 26, 2002
Daniel Beighley

Sellers
held the edge in Tuesday’s session, as the major indexes gapped lower
off the open, and maintained downtrends into the close. Volume weighed in a
little above average, which isn’t the healthiest sign if you’re a bull. Further
upside would be deemed more likely if down days came on lower volume, especially
during pre-holiday trading. Economic releases for the day were mixed. Tomorrow
will bring loads of data including sentiment, durable orders, and Chicago PMI.

The only gainer was in healthcare
(
$HMO.X |
Quote |
Chart |
News |
PowerRating), +2.69%.

In economic news, the GDP
preliminary number came in at 4.0% vs. a 3.8% consensus, consumer
confidence came in at a 84.1 reading vs. an expected 85.0, and new home
sales were at 1.007 million vs. an expected 85.0.

The 10-year U.S. Note
was +255 at 113 145

The Dollar was -0.04 at
106.66.

Volume was slightly above
averageÂ at 1,473,491,000 on
the NYSE, and 1,900,061,000
on the Nasdaq.

Market breadth was negative,
with NYSE declining issues over advancing issues by a ratio of 1.74, and down
volume over up volume by a 4.02 ratio. Nasdaq declining issues over advancing
issues came in at 1.60, and down volume beat up volume by a 3.22 ratio.

The
VIX
was +1.79 at 28.74. The TRIN
was +1.29 at 2.16.

Leading the Dow lower were:

Stocks in the news:

Chip maker Intel
(
INTC |
Quote |
Chart |
News |
PowerRating),
-1.36% at 20.20, had its fourth-quarter estimates raised by Morgan Stanley toÂ
$0.14 per share from $0.12 per share.

Also in the semi business, Semtech
(
SMTC |
Quote |
Chart |
News |
PowerRating), -19.87% at 14.51, plunged after it announced after the bell
yesterday that it will fall short of fourth-quarter expectations.

Drug maker Idec
Pharmaceuticals
(
IDPH |
Quote |
Chart |
News |
PowerRating), -9.35% at 32.85, sold off after a downgrade
from Merrill Lynch to “neutral” from “buy”. The stock was a
member ofÂ TM’s Implosion
List.

Biotech firm Biogen
(
BGEN |
Quote |
Chart |
News |
PowerRating),
-7.24% at 42.88, was downgraded by Merrill Lynch to “sell” from
“neutral”.

Also in the biotech biz, Amgen
(
AMGN |
Quote |
Chart |
News |
PowerRating), +0.44% at 47.06, had its estimates raised by Merrill Lynch due to
higher anticipated revenue.Â Â Â

Financial services company
Morgan Stanley
(
MWD |
Quote |
Chart |
News |
PowerRating), -4.35% at 44.32, was downgraded by Prudential to
“hold” from “buy”.

Why Volume Is Key For Bulls

BUY THE FEAR, SELL THE GREED

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