All Eyes On The Fed
Yesterday was a two-trend day: From 9:30 a.m. to 12:30 p.m. the market made lower highs and lower lows as the SPDRS traded down from 133 3/4 to 132 3/8. Then the “second day” started, with the market making higher highs and higher lows to an intraday high of 134 1/2 just after 3:00 p.m. Go figure.
The techs, led by the semiconductors and internet stocks, were the best of the litter. Because of tech’s positive showing, the S&P 500 finished up 1.70, the NDX finished up 51, while the Dow lost 60 points. Volume was extremely light and breadth was negative.
The focus today is obviously on Greenspan and the FOMC meeting. The bonds didn’t tell us much yesterday, finishing up two ticks. Maybe it’s in the market already, but we react, not predict.
One significant development: There was a high number of big-cap stocks that finished in the top of their daily ranges, so there are good setups in many of the high-relative strength names. I’m sure some of the buying yesterday afternoon was traders trying to avoid being short in front of a meeting that has taken on additional significance at these high levels on the averages and with the long bond pushing the 6% mark.
Target Stocks Of The Day  Today I’ll give you a mix of stocks so you’ll be in the game regardless of what is active. If the tech rally continues today, look for continuation entry in: CMGI [CMGI>CMGI], Sun Microsystems [SUNW>SUNW], Ascend Communications [ASND>ASND], Cisco [CSCO>CSCO], Dell [DELL>DELL], Lucent [LU>LU], Qualcomm [QCOM>QCOM], Motorola [MOT>MOT], Tellabs [TLAB>TLAB], and Qwest Communications [QWST>QWST].
Setups in Dow stocks include: Alcoa [AA>AA], Allied Signal [ALD>ALD], and Proctor & Gamble [PG>PG]; if energy gets a play today, look to Chevron [CHV>CHV] and Exxon [XON>XON]–both look ready to go.
Hewlett Packard (HWP) announced positive earnings last night, but it wasn’t a surprise to many institutions. Based on our May 10 commentary, entry was at 80 on a consolidation breakout; HWP went on to close yesterday at 88 3/4. Save your daily chart for future reference.
Let’s hope Greenspan’s on our side!
Program trading numbers  Buy: 6.40. Sell: 2.25. Fair Value: 4.60.
Editor’s note: If you want to learn more about Kevin Haggerty’s trading strategies, click on the link below to go to his new series of tutorial articles.