A New Kind Of Bio-T
The market shook off early gains after two key Dow
stocks beat Street expectations and hoisted the indices to fresh one-month
highs. A new kind of bio-“T” impacted the markets — bio-terrorism
rather than biotech —
as stocks sold off following widening reports of anthrax contamination and
word from House Speaker Dennis Hastert that spores of the contaminant
were found in the ventilation system of the capitol.
But remember that news usually only quickens making a market go
where it wants to go. There were at least three strong indications that markets
could reverse. First, there was a
Turtle Soup Plus One
Sell signal in the S&P futures
(
SPZ1 |
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PowerRating), a contract closely aligned to
the cash S&P 500 index through arbitrage. Look at the TradingMarkets
Futures Indicators for this setup.
Second, two down signals from
the Market
Bias Indicators Page, including an overbought reading on the McClellan
Oscillator, implied a pullback from the past three weeks rally off a
three-year low was in order.
Third, subscribers to Carolyn Boroden’s
S&Ps and Nasdaq Price Action Levels received e-mail notification last
night that “we are running into another
confluence of time relationships for a potential high.”
Fibonacci time relationships play a crucial role in defining market turns.
More on this subject is available in the TradingMarkets Education articles.
The S&P 500 is down 8.24 at 1089.49, the Nasdaq
is down 31.18 at 1690.89, and the Dow is off 69 at 9315.
Markets got off to a bullish start after both IBM
(
IBM |
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PowerRating)
and JP Morgan Chase
(
JPM |
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PowerRating) beat Wall Street earnings expectations. The
stocks are holding up despite the anthrax bio-T worry, up 2.6% and 3.1%,
respectively. Perhaps most remarkable about the early pop in these stocks is
the market’s ability to push higher despite declines in sales, earnings and
net incomes, factors cited in the two giants’ earnings reports.
Intel
(
INTC |
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PowerRating) also fell into the big-cap
optimistic category, rising 5% in its opening moves after earnings fell
nearly 100% from year-ago levels, in line with estimates the world’s biggest
semiconductor maker made last month.
Moving against the grain, TradersWire Interactive pointed out that Serena
Software
(
SRNA |
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News |
PowerRating) was “set up in an ascending triangle and is
holding near the high of the session despite the morning slide.” The
stock went on to add as much as 3% out of the setup before pulling back.
Make sure to check out TradingMarkets New Nightly Traders Reports.
The reports are designed to save you time in your research and to sharpen
your focus on where the action is likely to be on the following day. Four
new reports covering daytrading, the
intermediate-term, futures and options are now available
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