New Day, Same Game

• March 14, 2002
• Kevin Haggerty

The
negative analyst team stuck their heads up on
the semis yesterday, along with far too much media hype on retail sales. The
media hysteria on economic reports is bordering on the ridiculous. Go back and
see the government revisions in the job data and about everything else. The
media hype is immediate, so the futures get crazy, and people lose or make money
for all the wrong reasons. It’s getting to the point where it’s better to play
the position game with just index proxies and sector HOLDRs, along with options
on indexes that don’t have HOLDRs. 

The market was too soft
yesterday for the program gang to attack, but it’s a new day and a new game. I
read where Wall Street is trying to create the bubble again with all the hype,
and from listening to all the strategists and analysts that all of a sudden got
smarter after the rally, I believe it.

NYSE volume was slightly
above average at 1.35 billion, a volume ratio of just 30, and breadth negative
at -392. The SPX
(
$SPX.X |
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Chart |
News |
PowerRating) declined 1.0% and the Dow
(
$INDU |
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News |
PowerRating) -1.2%.
The Nasdaq
(
$COMPX |
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News |
PowerRating) closed at 1862, or -1.8%, and the NDX
(
$NDX.X |
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News |
PowerRating)
was -2.3%, but it was on less than average volume for both. Nasdaq volume was
about 10% less than average at 1.6 billion, with a volume ratio of 20, and
breadth -510. 

Greenspan mumbling about
corporations needing to spend was good enough to accelerate some more downside.
Thanks, Alan. We didn’t know that corporations had an unprecedented five
consecutive down quarters and that real earnings were zip. Thanks for the
update. Of course, the media is telling you there was no recession, and they get
all excited when a company pre-announces that earnings will bounce 50% for the
quarter. That’s true. But what they didn’t tell you was that earnings had
declined from $1.00 to 5 cents, if they were lucky, and now the big 50% jump is
from 5 cents to 7.5 cents. And, oh, I forgot to tell you. Revenues didn’t
increase. Sorry I forgot to mention that, but selling more widgets doesn’t
matter, does it? Because Arthur Andersen is our auditor and consultant.

The 60-minute trend has
gone slightly negative for all three major indices, so watch your eight-period
and 20-period EMAs on the 60-minute charts to spot a reversal to the upside. The
futures are early green as I do this, so maybe the media babble will be positive
today, giving the program gang ammo to attack by accelerating to the upside.
That gives us the opportunity for those afternoon Slim Jims. Today will probably
have more Triple Witch-related activity than Friday.

Stocks
Today

Daily chart long setups:
(
BBY |
Quote |
Chart |
News |
PowerRating),
(
RYAN |
Quote |
Chart |
News |
PowerRating),
(
GD |
Quote |
Chart |
News |
PowerRating),
(
ATK |
Quote |
Chart |
News |
PowerRating),
(
PBY |
Quote |
Chart |
News |
PowerRating),
(
BGP |
Quote |
Chart |
News |
PowerRating),
(
CHS |
Quote |
Chart |
News |
PowerRating),
(
LIZ |
Quote |
Chart |
News |
PowerRating) and
(
BCC |
Quote |
Chart |
News |
PowerRating).

The
(
$SOX.X |
Quote |
Chart |
News |
PowerRating)
finished -4.4% yesterday, to make that a three-day decline of -9.1%, so we will
be alert for the buy game to resume today. Focus on
(
KLAC |
Quote |
Chart |
News |
PowerRating), which is a
pullback to the 50,
(
MU |
Quote |
Chart |
News |
PowerRating), which is a pullback to the 200,
(
AMAT |
Quote |
Chart |
News |
PowerRating), which
is a pullback to the breakout base level, and also
(
BRKS |
Quote |
Chart |
News |
PowerRating), which is a
pullback to the 20, and
(
MCHP |
Quote |
Chart |
News |
PowerRating), which is above all of its moving
averages. 

No, I didn’t get out of
bed on the wrong side today, but after a while, all of this babble and hype just
gets to me. So, have a good trading day, and look for those Slim Jims this
afternoon, and be ready for the program guys to attack on the upside. 

Five-minute chart of
Wednesday’s SPX with 8-, 20-,
60- and 260-period
EMAs

Five-minute chart of
Wednesday’s NYSE TICKS