Big ‘Research Call’ In The Sky
 Some of the big techs kept running yesterday as the S&P 500 started out up 6 points by 9:45 AM ET after the influx of retail orders; by 1:30 PM it was in negative territory. But the afternoon trend was very tradable, as the S&P finished up 8 points on the day.
Despite the continued tech frenzy, the Dow finished in the minus column, breadth was negative and the up volume/down volume ratio was negative until the late rally, finishing on the positive side by 63 million. Institutional blocks of 10,000 or more shares totaled over 19,000, and the volume of 891 million was unusually strong, considering the bonds were closed.
They will certainly try to run the S&P 500 cash above yesterday’s high of 1382.09 after closing it at 1381.44 The knee-jerk panic in Microsoft (MSFT) appears to have subsided; volume has settled down to around 17 million shares for the second day in a row. Every company that MSFT touches or is rumored to be involved with shines, as Tandy (TAN) and Circuit City (CC) did yesterday. Microsoft has probably done more for the country than the current Justice Department. Why not break it up instead of Microsoft?
They will certainly try to run the S&P 500 cash above yesterday’s high of 1382.09 after closing it at 1381.44. The reference point on your five-minute chart for an early upside move in the Diamonds (DIA) is 106 1/4.
Many of the high-flyers, such as JDSU yesterday, are trading some wild travel ranges, as the stocks move from various buying and selling pressures (in addition to the normal OTC manipulation of these high-beta stocks). If you’re in them, you need to have one finger on the eject button at all times, and you should not day trade them without direct access execution or an options strategy.
There probably won’t be anything crazy today, unless the FOMC meeting has been leaked; we’ll see that immediately in the futures if it happens. Oh, to be part of the “research call” in the sky.
Pattern Setups  There were some interesting pattern setups in retail yesterday. Watch Wal Mart [WMT>WMT] and Home Depot [HD>HD], as well as the S&P Retail Index [$RLX.X>$RLX.X], which is in the same pattern (right near consolidation). Other stocks: Johnson & Johnson [JNJ>JNJ] and National Semiconductor [NSM>NSM] (the semiconductors were very strong yesterday).
Program Trading NumbersBuySellFair Value6.754.305.50 General Electric [GE>GE] is in a perfect spot for the generals to push one of their favorite stocks out of an ascending triangle to new highs. If they run the Dow, American Express [AXP>AXP] will probably be there; watch it above its 20-day exponential moving average (EMA) of 146.40. Also, CMGI [CMGI>CMGI] is a bottom fisher (of sorts). Watch for opportunities on your five-minute chart–it’s at the bottom of a three-week range. Finally, if they come for Best Buy [BBY>BBY] today, they could try to give it a good run above its 200-day EMA.
Figure 1.  General Electric (GE), daily. Triangle pattern forming on the daily chart.   Source: Quote.com.
Around 8:30 AM ET, the S&P futures are now up 11 points. Maybe that mysterious research department is at work.
If you want to learn more about Kevin Haggerty’s trading strategies, click on the link below to go to his series of tutorial articles.