Missouri Market

January 17, 2002
Dave Landry

On Thursday, the Nasdaq lapped higher and then
headed lower. It found its low late in the morning and then chopped
its way higher. The good news is that the buying accelerated going
into the close.

From a psychological perspective, Thursday’s
action is a major positive as the recent lows held and it makes back
much of Wednesday’s losses. It also puts the index back above its
50-day moving average. However, follow through will be key.

The S&P also had a decent day. It remains
below its 50-day moving average.Â

So what do we do? I’m
encouraged by the magnitude of the the reversal and by the fact that I
have some market timing systems triggering buys, namely the TRIN
Reversal. This signal is occurring from a multi-month high of the
three-day average TRIN reading. And, in my experience, these signals
tend to be stronger than shorter-term signals. However, this market
has been so choppy lately, I think I’m going to take more of a show–me
approach. Therefore, look to trade the long side,
but wait for entries,
and don’t bet the farm.