How To Use The News To Your Advantage

April 2, 2003
Dave Landry

On Wednesday, the Nasdaq gapped higher and continued higher
throughout most of the morning. It then traded mostly sideways throughout the
rest of the day. This action has it closing well.

The S&P put in a similar performance. This action has
it closing well and closing in on its 200-day moving average.

The March highs could provide minor resistance.

Technically, the market is performing well. The
continuation of the rally (basis the S&P) off of the 50% retracement/50-day
moving average is impressive. It suggests that the thrust from lows remains
intact. The sector action was impressive too. There were nice rallies in sectors
such as banks, biotech, broker/dealer, drugs, retail, transports, chemicals and
Internet. Even sectors in question lately such as software and semiconductors
did very well.

So what do we do? Based on the above, you’d think that I’d
be a raging bull. Well, if the news coming into today (Wednesday) had been negative (or the perception of the news negative), things would look
completely different. In other words, the market remains hostage to events.
Further, the indices are quickly becoming overbought and could hit resistance at
the March highs. Therefore, continue to keep new positions on the light side. If
you are long, look to take partial profits and trail a stop should positive news
continue to flow.

No setups tonight. If we continue higher and have an
orderly correction, we should see a plethora of setups soon.

Smoke ’em If You Got ’em Part 2

Teva Phamaceuticals
(
TEVA |
Quote |
Chart |
News |
PowerRating), mentioned Monday night,
continued to rally nicely on Wednesday. This action has it closing well
and at new highs (a). When blessed with a such a nice quick profit (especially
in this environment!), make sure you lock in a piece.