Expect Very Thin Markets
I hope everybody had a wonderful holiday. For those of you who are going to be in the game Friday, you can expect some very thin markets. On Wednesday we saw relatively light volume at 737 million shares, with institutional blocks of 10,000 shares at only 14,947. That didn’t stop the major overweighted techs from causing the S&P 500 and Dow to finish on the plus side. Microsoft[MSFT>MSFT], Intel [INTC>INTC], Cisco[CSCO>CSCO], Dell [DELL>DELL], Sun Micro [SUNW>SUNW], and EMC [EMC>EMC] were the catalysts for the S&P 500 to finish up almost 1 percent. It doesn’t take much to run these stocks during a holiday week. “You can expect some very thin markets” The institutional Internets continued their onslaught, with CMGI [CMGI>CMGI], Amazon[AMZN>AMZN], eBay [EBAY>EBAY], and Yahoo! [YHOO>YHOO] finishing with multipoint moves. These and some of the other larger Internet stocks are the big tie-breakers for portfolio managers to outperform the S&P 500 this year. Our funny-money stocks from Wednesday had multipoint moves, and they also took Tandy[TAN>TAN] to another new high. Many pullbacks in the major techs and Internets mentioned above will be met with buying for the year-end march to get the S&P 500 to +20% on the year. Hopefully, your funds will outperform that bogey also. When I say “pullbacks,” refer to the reference points from Wednesday’s commentary. Friday will be very thin, and if you’re in the game you can get some good moves if they decide to run to the upside. When it gets thin, however, you should trade smaller than usual and keep your stops in the 1/4- to 1/2-point range and go home flat, assuming you’re in a daytrade. Right now, the S&P’s are up over 4 points, with the major OTC stocks green and the Internets even stronger than the techs. So it looks like they’ll try to get it moving early. Remember, the rookies are on the book on the floor of the New York Stock Exchange — it won’t take much to run. I’ll give you a few more stocks than normal that set up because there probably will be a pretty broad move if they do take them up. Program Trading NumbersBuySellFair Value5.603.404.50 Pattern setups. Merck
[MRK>MRK], Biogen [BGEN >BGEN], Amgen[AMGN>AMGN], AOL [AOL>AOL] (going above Tuesday’s high), ComverseTechnology [CMVT>CMVT], NetworkAppliance [NTAP>NTAP],Sun Micro[SUNW>SUNW],Xoom.com [XMCM>XMCM],CMGIÂ [CMGI>CMGI], ISSGroup [ISSX>ISSX], Lycos[LCOS>LCOS], and Global Crossing[GBLX>GBLX]. Have a good trading day.