Is It Labor Day Yet?

August 15, 2001
Dave Floyd

Again, the
markets offered a few trades which were profitable, but only off of
key technical numbers. The numbers yesterday that offered them were: 1200, 1202
and the now infamous 1191. The chart of the S&P futures below shows the
only two trades I took all morning. It is sad to think that these setups are
reason for jubilation. Is it Labor Day yet?

The first trade, point A to B
represented a pullback to just under 1200. The trigger point was the first burst
(print) above 1199, after consolidating at 1197-98. Notice that the move
stopped dead at 1202.5, one of the Key Technical
Numbers I had mentioned in yesterday’s column. The second trade, C to
D, the converse of the first one, was a short when a move back above 1200
failed. In terms of a stock to trade the move, Morgan
Stanley
(
MWD |
Quote |
Chart |
News |
PowerRating), IBM
(
IIBM |
Quote |
Chart |
News |
PowerRating)
and Merrill Lynch
(
MER |
Quote |
Chart |
News |
PowerRating) all traded with
the move.

After the close I did a simple scan
for stocks that make good intraday traders. While not completely surprised by
the results, it clearly shows just how dead this market is. Here are the
parameters:

1. Average daily range greater
than 2.2 points for 20 days.

2. Average daily volume greater
than 1,000,000.

Here are the results, the one
noteworthy observation is that there were no stocks that met the criteria in the
Nasdaq 100
(
NDX |
Quote |
Chart |
News |
PowerRating), the stocks most highly correlated with the Nasdaq futures,
and only one, Morgan Stanley, in the S&P 100. The Nasdaq and NYSE offered a
few more stocks.

Nasdaq:

Nasdaq 100:

None

NYSE:

S&P 100:

(
MWD |
Quote |
Chart |
News |
PowerRating)

I do remain optimistic going into
today since the market keeps testing the 1191 and 1200 level. The good trades
will still take place only at those numbers until this range is broken. The
worsening situation in the Middle East will need to be monitored as a potential
catalyst for the market.

Key Technical
Numbers:

S&Ps	Nasdaq
1209-10	1680
1200	1665
1194	1649.17
1191	1640.5
1185.5	1618

For those of you who do nightly scans
for longer-term plays, have you noticed something lately? Bank stocks are
clearly the most visible in terms of stocks exhibiting high accumulation,
positive OBV and Relative Strength. Is this indicative of a market bottom?
A list of the stocks I found is below:

**Some of these
stocks have light volume, so be careful.

I am going to steal a page from Dave
Landry’s column yesterday. Until this market breaks the current range, there
is not a whole lot to write about each day. Trust me, once this market breaks,
there will many more observations and comments to look forward to. Until then,
keep your powder dry and trade selectively.

As always, feel free to send me your
comments and questions.

Dave

Is It Labor Day Yet?

BUY THE FEAR, SELL THE GREED

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