Deploying The Troops

Back to the high end of our 1999 trading range. The
institutions stuck to their usual game plan and came for the techs, drugs, and specialty
retailers again–it’s the only
way they can hope to keep up with the S&P 500. At least it makes stock selection easy, as
evidenced by the multi-point moves in many of yesterday’s names.

After a 357 point rise in the Dow over three days, the market rolled over yesterday for
small losses
in the Dow and S&P. (Hope it wasn’t a buy day, sell day, then sell short day sequence.) After
a brief morning rally, the market sold off and then moved sideways at the low end of the S&P
500 cash (intraday) range.

The SPDRs [SPY>SPY] could be a good play today on a move (either way) out of their 127 3/4 –
126 7/8 range.
Remember, this has been a narrow move back to the top of the S&P 500 range. Leave flat at the
end of the day.

Many of the obvious market leaders have gapped over the last three days.
Look for some pullbacks
and consolidations today, but be ready to play these kinds of stocks if they move out of any
long, tight ranges on your five-minute charts. If the institutions decide they want new highs,
it will happen. (We’re getting close to the end of February, aren’t we?)

It will take negative comments from our new portfolio strategist, Alan Greenspan (what’s
he all about?) to prevent new highs by the end of the month. The big guys are deploying the
troops for the assault.

Target Stocks Of The Day  Watch IBM [IBM>IBM] above 177 15/16 out of a
consolidation, or out of any pullback pattern near the 50-day moving average level of 174.08.
Applied Materials [AMAT>AMAT] and
Costco [COST>COST] are new-high consolidation plays.

ADC Telecommunications [ADCT>ADCT],
Comverse Technology [CMVT>CMVT], and Action Performance [ACTN>ACTN] are possible continuation
trades. Broadcom [BRCM>BRCM] re-crossed
and closed above its 50-day moving average on good volume; look for a continuation or a
pullback-and-go opportunity to enter.

Finally, Clorox [CLX>CLX] didn’t give entry yesterday, so look for
an opportunity above yesterday’s high.