Nasdaq Setting Up

March 5, 2002
Dave Landry

Each evening we
focus on the most interesting aspects for the upcoming
trading day. The comments are based on observations of the
nightly updates of the Futures and Market Bias pages. They
are provided for educational purposes only and are not
intended to be direct trading advice. Also, keep in mind
that these remarks are made up to 12 hours in advance of the
markets opening. Therefore, overnight events may alter the
outcome of these observations.

The March Nasdaq 100 futures
(
NDH2 |
Quote |
Chart |
News |
PowerRating) appear to be stalling out near their
recent highs. This, combined with the overbought nature of the market (see my
stock commentary for details) suggests that it could head lower.

May bellies
(
PBK2 |
Quote |
Chart |
News |
PowerRating) look like they have the
potential to break out of a high-level cup and handle.

Volatility Watch

May cotton
(
CTK2 |
Quote |
Chart |
News |
PowerRating) isÂ consolidating within a narrow range (which is
confirmed by low volatility readings). This suggests that it could break out
soon. The fact that it has a lot of overhead resistance suggests the breakout
could be to the downside.

March feeder cattle
(
FCH2 |
Quote |
Chart |
News |
PowerRating), mentioned Monday night, remain a low
volatility situation.
Watch for a larger-than-normal move (in either direction) as volatility reverts
to its mean.Â