Monday’s Stock Watch

• August 2, 2002
• TradingMarkets Editors

This past week was another
downer for the markets. It’s the middle of summer, and we’re dealing
with a potential low in major indexes. If July 24 truly was a bottom, it has
been confirmed with a follow through day (Monday), and may be in the process of
re-testing or setting up in a

Kevin Haggerty 1-2-3 pattern.

Only time will tell — no reason to get excited
just now. Regardless, if price action holds up at recent levels, this is no
environment for the intermediate-term trader. The market needs to come a long in
way in proving itself before we seriously consider buying quality stocks setting
up in bases.

In the last three weeks, the NYSE logged in four
accumulation days and three distribution days, while the Nasdaq made three
accumulation days and two distribution days.

Mark Boucher‘s
Top
RS and ER List, remains flat, as his

Bottom RS and ER List remains bearish with continuous readings over 20.

The search goes on for quality stocks setting up.

From Friday’s action:

Market breadth was negative, with NYSE
declining issues over advancing issues by a ratio of 2.78, and down volume over
up volume by a 4.46 ratio. Nasdaq declining issues over advancing issues came in
at 2.13, and down volume beat up volume by a 4.10 ratio.

The Dow Jones Industrial Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating) closed down 2.27% at 8313.13. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
closed down 2.30% at 864.24.
The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed down 2.51% at 1247.84.

Top sectors:

Gold and
Silver Index
(
$XAU.X |
Quote |
Chart |
News |
PowerRating), up 3.36% at 113.03.

Pharmaceutical Index
(
$DRG.X |
Quote |
Chart |
News |
PowerRating), up 0.61% at
290.14.

Losing sectors:

Airline Index
(
$XAL.X |
Quote |
Chart |
News |
PowerRating), down
6.85% at 48.63.

S&P Chemical Index
(
$CEX.X |
Quote |
Chart |
News |
PowerRating),
down 5.23% at 152.87.

Sectors with Most New 52-Week Highs (10 or more):

None

Watch List Action:

Now on our handles list, we have a shabby looking Apollo Group
(
APOL |
Quote |
Chart |
News |
PowerRating) which
fell 4.72% Friday on below average volume for a slight distribution day. As
mentioned before, any breakout from such an awkward base needs to be cautioned
against. This market is reason enough to refrain from buying breakouts.

Recent Breakouts

size=2>

We monitor the action of Recent Breakouts as an indicator of
the market health for IT traders. When breakouts are acting well, this is a good
sign for the likelihood of further sustainable breakouts. When breakouts are
failing, IT traders should be even more cautious.

color=#ffffff size=2>Company Name	color=#ffffff size=2>Symbol	color=#ffffff size=2>12 Month RS	color=#ffffff size=2>Price	color=#ffffff size=2>Price Change	color=#ffffff size=2>Average Volume	Pivot	52-Week High
None

Stocks Forming a Handle

color=#ffffff size=2>Company Name	color=#ffffff size=2>Symbol	color=#ffffff size=2>12 Month RS	color=#ffffff size=2>Price	color=#ffffff size=2>Price Change	color=#ffffff size=2>Average Volume	Pivot
Apollo Group	( APOL | Quote | Chart | News | PowerRating)	90	39.28	+ 0.14	2,163,600	39.70

Stocks Building A Base

color=#ffffff size=2>Company Name	color=#ffffff size=2>Symbol	color=#ffffff size=2>12 Month RS	color=#ffffff size=2>Price	color=#ffffff size=2>Price Change	color=#ffffff size=2>Average Volume
None

href=”mailto:danielb@tradingmarkets.com”>danielb@tradingmarkets.com

If you are new to the “IT” strategy, be sure to
take a look at our

intermediate-term online trading course.

Intermediate-Term Traders
Report is posted on
Tuesdays and Fridays. For other intermediate-term commentary, be sure to read

Mark Boucher (Fridays),

Tim Truebenbach (Tuesdays and Thursdays), and

Gary Kaltbaum (Mondays and Thursdays).