An Impressive Comeback
As
expected, yesterday offered traders good volatility and follow
through, although the afternoon was not nearly as good as the morning.
Despite Friday’s selloff, the market managed an impressive comeback
yesterday with the exception of a 5-point freefall in the S&P futures right
on the close prompted by Merrill Lynch and Morgan Stanley unloading
several hundred contracts.
Lewis Borsellino made an
interesting observation in his column regarding the rally, I will paraphrase,
but it is along these lines:Â
Forty-four of the 62 times the
market has sold off by 2% or more, the following trading day managed a rally of
at least 1%.
Despite more negative news in
the tech sector by way of Corning
(
GLW |
Quote |
Chart |
News |
PowerRating), it looks as though the
market will be opening higher this morning, right back to the stubborn 1206
level, with the Nasdaq 30 points clear of 1700. While
the news remains negative, the market is managing to ignore it. However, the
futures need to close above overhead resistance in order to make me a believer
in further upside moves. Those resistance
areas being:Â 1245 on the S&Ps
and 1827 on the Nasdaq. Intraday, the
S&Ps face 1201.8 and 1194.4 for support and 1207.6 and 1215 for resistance.
The Nasdaq will need to contend with 1748 on the upside and 1703 as
support.
Some stocks that are sitting at
technically significant levels are:
Motorola
(
MOT |
Quote |
Chart |
News |
PowerRating):Â
200-day moving average at 15.25 ahead of earnings today
Microsoft
(
MSFT |
Quote |
Chart |
News |
PowerRating):Â 200-day moving
average at 65.74
Krispy Kreme
(
KKD |
Quote |
Chart |
News |
PowerRating):Â sitting just
below 20-day moving average at 37.18
Lehman Brothers
(
LEH |
Quote |
Chart |
News |
PowerRating):Â sitting
just below 50-day moving average at 73.60Â
These areas may represent good
intraday trade setups, so keep an eye out.
Yesterday in the New York
Times there was a very sobering article regarding 401(k) plans, the
retirement savior of the American worker, or so they thought.Â
For the first time ever, 401(k)’s are losing money.
This is sure to have a major impact on participants when they realize
that they need to re-evaluate the way they manage their personal wealth.
The article goes on to point out that people have been under-saving due
to the market rising fast enough to offset the shortfall.Â
Thought For The Week:
“Although
the cheetah is the fastest animal in the world and can catch any animal on the
plains, it will wait until it is absolutely sure it can catch its prey.
It may hide in the bush for a week, waiting for just the right moment.
It will wait for a baby antelope, and not just any baby antelope, but
preferably one that is also sick or lame. Only
then, when there is no chance it can lose its prey, does it attack.
—Mark Weinstein
As always, feel free to send
questions or comments to davef@tradingmarkets.com
Dave
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