Proceed With Caution
Pre-Geenspan–and with much media hype–we had four straight down days in both the S&P 500 and Dow, followed by five straight up days for both indexes.
The NASDAQ and techs led last week, up 4.7%, while the S&P gained 3.8% and the Dow rallied 3.5%. Bonds recovered from their mini-panic, and all eyes are now on the CRB index, which is looking like it might break out of a six-month base and above its 200-day moving average.
We start the week with the market pointed up, having confirmed 1287.89 as the last minor swing point. Volume was extremely light in both the SPDRs and QQQs on Friday. NYSE volume was 915 million, the largest of the week, but the S&P ended up making a very narrow-range day. That, on top of four straight up days, says “proceed with caution,” even if Friday was triple witch. Look for resistance at the 1350-55 level in the S&P.
Around 8:30 AM ET the futures are up 2.5 points, and the NASDAQ generals are all up. I think we’re pushing the envelope a little, but this week the onus is on the institutions.
Target Stocks Of The Day  Some setups that look good include: Dupont [DD>DD]; [LU>LU], which broke out of an eight-week base on Friday; RF Micro Devices [RFMD>RFMD]; [IBM>IBM], which is a cup-and-handle at its highs; SDL Inc. [SDLI>SDLI], a narrow-range pattern; Go2Net [GNET>GNET], which ran more than nine points on a breakout last week–it’s got room if they want to run it again; Triquint Semiconductor [TQNT>TQNT], another narrow-range pattern; Automatic Data Processing [AUD>AUD]; Ameritech [AIT>AIT], another cup-and-handle at its highs, and Micron Technology [MU>MU], which closed above its 200-day moving average– they love to run Micron, so watch it if they come for the semiconductors.
Program trading numbers  Buy: 15.20. Sell: 10.55. Fair Value: 12.90.
Editor’s note: If you want to learn more about Kevin Haggerty’s trading strategies, click on the link below to go to his new series of tutorial articles.