Same As It Ever Was

March 19, 2002
Dave Landry

On Tuesday, the Nasdaq chopped around in a narrow range.
This action (or lack thereof) keeps it at its 50- and 200-day moving averages.

The S&P ended marginally higher. It remains below the 1180 resistance level.

The VIX continues hit multi-year lows. It is now about 5%
away from its 10-day moving average. Watch for a correction if it gets to 10% or
more (i.e., a CVR III/CVR III Modified) away from this average.

So what do we do? The song pretty much remains the same.
The market is hanging in there but the S&P remains below resistance and the
VIX remains low. Therefore, continue to keep it light. And, stick with those issues on the long side that have done well
before the recent run up and have had orderly corrections as of late. Potential
sectors here remain consumer non-durables, defense, auto parts and possibly,
once again, the homebuilders.

Looking to potential setups, Lear
(
LEA |
Quote |
Chart |
News |
PowerRating),
mentioned Monday night and in the
strong aforementioned auto parts sector, looks like it has the potential to
resume its uptrend out of a pullback.

Smoke ’em (and Trail ’em) If You Got ’em

Alberto Culver
(
ACV |
Quote |
Chart |
News |
PowerRating), in the strong consumer
non-durables, has rallied strongly since first mentioned (a). When blessed with
such a nice profit, don’t be ashamed about locking in a piece. Also, make sure
you trail your stop on your remaining shares. A two-bar low (b) is often a
simple, yet effective, technique. For more on money management, see my articles
under TM
University.