Bumping Up Against Resistance

October 23, 2001
Dave Landry

On Tuesday, the Nasdaq started strong early but then drifted
and chopped to close poorly.

The S&P also rallied early before reversing.Â

It looks like it’s bumping up against resistance at 1100.
This also corresponds with the 50-day moving average. This action suggests a
possible return to the bottom of its trading range–circa 1050.

So what do we do?Â Well,
now Anthrax seems to matter–again. This, combined with the fact that the
S&P is stalling out at resistance levels suggests that you might not want to
throw away that sticky note just yet. Also, as I scan through my database, I was
unable to find any meaningful longs. Therefore, as mentioned recently, let’s
wait until the market can get above its 50-day moving averages and stabilize
before we get too bullish. With that said, I think there’s the potential for
some plays on the short side. No matter what side you play, wait for entries and
don’t get too much conviction (one way or the another) in this news driven
environment.