Mixed Signals

April 10, 2003
Dave Landry

On Thursday, the Nasdaq opened slightly higher but began to
chop lower. However, it found its low fairly early and generally worked its way
higher throughout the rest of the day.

This action is a positive since it has it stabilizing (at
least temporally) above the bottom of its recent trading range and its 200/50-day moving averages.

The S&P also appears to have stabilized (at
least temporally here too).

On the other hand, the VIX hit multi-month lows (a). It’s
beginning to stretch away from its 10-day moving average but is below the 10%
threshold used in the CVR-III/CVR III-Modified systems.

So what do we do? The fact the indices appear to have stabilized
(for now) is a positive. However, the action in the VIX suggests that we could
be in for more corrective action soon. Therefore, based on these cross-currents,
you might want to continue to avoid placing any big bets. On the bright side,
tonight (Thursday), I’m seeing more setups on the long side than I’ve seen in a
while. Heath care plans, retail, selected drugs and generic drugs all look like
they have potential. Also of interest is the fact that GE
(
GE |
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Chart |
News |
PowerRating) looks
constructive.

Looking to potential setups, Anthem
(
ATH |
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Chart |
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PowerRating), in the strong health care plans, looks
like it has the potential to resume its uptrend out of a pullback.

Advance Auto Parts
(
AAP |
Quote |
Chart |
News |
PowerRating), in the strong retail-auto
parts sub-sector, looks like it has the potential to resume its uptrend out of a
pullback.