Important Technical Levels To Watch

March 28, 2003
Dave Landry

On Friday, the Nasdaq opened lower and after initially
chopping around, began to rally. However, it found its high by mid-day and
generally worked it way lower throughout the rest of the day. This action has it
closing poorly.

The good news is that the 3/24 lows continued to hold.

The S&P put in a somewhat similar performance.

The 3/24 lows, circa 860, continue to hold here too.

Technically, so far, the markets are holding it together.
However, I have two concerns. One, it seems as I flip through hundreds of
charts, I’m seeing some underlying weakness. Two, we remain in a news-driven
environment. In fact, at the time this is being composed, just two hours from the
NYSE close, there have already been explosions heard in Baghdad and Kuwait.
Further, a Turkish airliner has been hijacked. So, if this is indication of
what’s to come, it could be a long weekend.

So what do we do? Since we have absolutely no control over
the news events, let’s focus on the technicals. As implied above, indices
continue to hold support. Further, most of the sectors mentioned lately,
although somewhat soft over the last few days, still appear to be attempting to
make meaningful transitions higher. Once again, these include (but are not limited to) retail,
transports (with the exception of trucking which was hit hard on Friday), semis,
broker/dealer, Internet, banks, biotech, gaming and medical
appliances/equipment. Other areas such as
insurance and chemicals still look like they could be trying to make a transition higher.
So, once again, continue to focus on the long side but wait for entries in light
of the recent weakness. And, once again, at the risk of
preaching, no matter
what you do, continue to keep it light as long as we
remain in a news-driven environment.