‘Alfie’

• February 27, 2002
• Kevin Haggerty

A
choppy day yesterday,  starting
with a typical flash Futures move on rumor and consumer confidence. That flash
down was reversed up rather quickly but then we got the choppy sideways action
until — you guessed it — the 2:40 p.m. bar, when the program gang made another
premeditated move up. That push lasted until the 3:15 p.m. bar before down into
the close on the SPX
(
$SPX.X |
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right on the 10-week EMA of 1115.06. Both the SPYs and QQQs had an increase in
volume while they closed basically flat, with the NDX -0.5% and the SPX
virtually unchanged. A lot of noise about nothing.

There was a significant
pickup in DIA volume yesterday, while the Dow closed down 30 points or -0.3%.
The sheep are chasing the same stocks — homebuilders and related, basic
industries and retail. I thought the headline in today’s IBD was humorous:
“Will The Strong Buck Break Upturn?” Just a few months ago, they were
worried about a dollar crash sinking the markets, all because the dollar had
just backed off from record highs by about 10%. So goes the game.

If you keep track of all
the BS, as I do, and realize it for what it is, your market dynamic skills will
improve tremendously and you will become much more attuned to “Sequence
Trading” which is, in essence, trading the overreactions which this new
breed of portfolio manager seems to have plenty of. 

We have our dose of
Federal Reserve double talk today. Think about it: What can he say? He’s already
taken rates down to Japanese levels — after his “choke” on the
upside. Alfie wants to be loved again after his dismal performance, so I would
bet part of his double talk will be optimistic. If it is, the basic industry
stocks will pop again, so tune in on those Slim Jims, especially in the
afternoon.

With end of month action
today and to a lesser extent, tomorrow, I would expect an increase in activity.
Yesterday, NYSE volume was 1.25 billion, a volume ratio of 55 and breadth +440.
Best sector action was healthcare, also the
(
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retail
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RLX.X |
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(
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was off slightly at -0.7%.

Daily
chart long setups today are:
(
NUE |
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(above 60);
(
BNI |
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(
UNP |
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(
IP |
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(
BAC |
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(
STJ |
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(
ADVP |
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(
FDO |
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(
GDW |
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(
BA |
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(
GD |
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(
JWN |
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(
ADBE |
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(
JDAS |
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(
SYMC |
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(
KLAC |
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(
LTXX |
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(
BAX |
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(
LLL |
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For you bottom fishers,
some unusual volume came in, so you have a possible trend reversal in
(
F |
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(
MCAF |
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Have a good trading
day.

Five-minute chart of
yesterday’s SPX with 8-, 20-,
60- and 260-period
EMAs

Five-minute chart of
yesterday’s NYSE TICKS