Backed, Not Sold

• April 18, 2002
• Kevin Haggerty

Three
steps up and the first one back yesterday, as
the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) was -0.2%, the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) -0.8%, and NDX
(
$NDX.X |
Quote |
Chart |
News |
PowerRating) -0.6%, along with the Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) at -0.2%. After
making a higher high by the 10:45 a.m. bar, the rest of the day was trend down.
After the power day we had, you wouldn’t expect a large pullback. If we
do, then it was a power fake day. Option expiration this Friday and the ongoing
earnings circus will keep the volatility active, but still all within a trading
range on the daily charts.

The SPX early move up
halted at an intraday high of 1133 vs. the 200-day EMA of 1133.33. The NYSE
volume increased some to 1.372 billion, the volume ratio remained positive at
56, with breadth at +170. Net net, it backed off, it wasn’t sold off. The
Nasdaq’s volume ratio was also positive at 59.

The
(
$SOX.X |
Quote |
Chart |
News |
PowerRating),
which is the focal point for any advance from here, was +1.3% for the fourth up
day in succession and is +10.2% over the four days. Like Eddie from the Cruisers
said, “The music’s got to breathe, man.” To me, that means after
thrust, there is a narrowing of volatility or brief consolidation. See your
daily chart. Don’t get carried away — or out — on any emotional continuation
long entries. Play the pullbacks.

Stocks
Today

Our banks that we have
been involved with have done well, as
(
WFC |
Quote |
Chart |
News |
PowerRating) hit a 52-week high yesterday, to
follow
(
BAC |
Quote |
Chart |
News |
PowerRating), which had already made new highs out of the consolidation last
week. So, for today, if they come for the banks again, be ready in
(
STT |
Quote |
Chart |
News |
PowerRating),
(
FITB |
Quote |
Chart |
News |
PowerRating) and
(
CMA |
Quote |
Chart |
News |
PowerRating).

Other stocks:
(
KRB |
Quote |
Chart |
News |
PowerRating),
(
GCI |
Quote |
Chart |
News |
PowerRating),
(
UPS |
Quote |
Chart |
News |
PowerRating),
(
INFY |
Quote |
Chart |
News |
PowerRating) and
(
NCC |
Quote |
Chart |
News |
PowerRating). 

Have a good trading day.

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

Five-minute chart of
Wednesday’s NYSE TICKS