Home On The Range

October 31, 2002
Dave Landry

On Thursday, the Nasdaq opened flat and after some initial
chopping around, began to rally. However, the rally was short lived as it
quickly found its high. It then sold off and chopped around for the rest of the
day. This action has it closing just about where it started.

The S&P was also choppy.

So what do we do? The fact that the indices failed to
follow through suggests that we remain stuck in trading-range mode. Another
concern is the fact that previously strong sectors are having a hard time
keeping it together. The HMOs (below) appear to be the latest casualty
here. Don’t get me wrong, the number of positive sectors (see Wednesday’s
commentary) is keeping me cautiously optimistic. However, until we break out of
the trading range, we should probably continue to keep it light.