Short-Term Bias Up

The
majority expected a .25 point
rate
reduction, while the pre-hype had instilled in the majority’s small brain that
less than .50 point was a disappointment. That’s exactly what the gang
capitalized on as they started hitting the futures 10 minutes before the
announcement. No secrets on Wall Street.

The S&P 500
(
SPX |
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sold
off to 1207 by 14:35 p.m. (20 minutes of glory and profits for the gang), then
rallied back to 1219 in seven bars, before fading to close at 1211 (-0.5% on the
day). You don’t have a clue about .25 or .50, but you do know that it’s the
sixth rate cut and liquidity has been pumped into the system as the Fed has
jacked the money supply big time which is far more important than your .25 or
.50.

The new Fed governors are
Greenspan’s lackeys (that’s his style, total control, doesn’t want anyone to
challenge him) but most of them are hawks and keep harping on inflation so the
media brainwashes all of you — just like in politics. Right now, until shown
otherwise, it’s looking more like deflation is a bigger threat. The tech and
telecom industries are decimated; commodities are in continued downtrends and as
Arthur Cashin said recently, "Should real estate prices start to fall as
commodity prices have already, the Fed could become powerless in the face of
asset deflation, i.e., Japan."

There is a significant
amount of institutional cash on the sidelines. We are in the last two days of
the six-month report card with a holiday approaching, in addition to the
beginning of the third quarter when some money will probably be put to work, as
in June. The short-term bias is up as long as the 1203 low holds on the SPX and
also the 1655 Nasdaq 100
(
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low.

You are more than familiar
with the box of resistance just above the major indexes. The NDX bumped up
against the 1768 zone twice yesterday, making that the fourth time since 6/21.
You should expect a rush if that hurdle is cleared. There will probably be more
action today, as any marking-up of positions by the Generals is frowned upon by
the regulators on the last day of the quarter.

In case you don’t know, the
New York Stock Exchange closes early next Tuesday and I expect the liquidity to
be razor-thin on Thursday and Friday, as staffs will be light on the floor.

(September
Futures)

Fair Value

Buy

Sell

7.45


  8.65  

  6.15  

Stocks
Today

The institutions have been
relentlessly selling many of the decimated techs and telecoms to "make it
go away" for the six-month report card, so there might be some short-term
bounce in some of them after the quarter ends. That list is too long and too
obvious to cover here.

Stocks to focus on today:

In healthcare,
(
THC |
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,
(
HCA |
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and
(
HCR |
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(these are of course winners for the institutions, and remember,
they mark up winners and sell losers). 

Also
(
CTXS |
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,
(
TMPW |
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,
(
ADBE |
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(which is basing right below its 200-day EMA for the past eight
weeks, so you want to wait to see if the Generals decide to take it out),
(
CTAS |
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and
(
IBM |
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.

In the pharmaceuticals
(
IDPH |
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,
(
IMCL |
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,
(
CEPH |
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,
(
ABGX |
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and
(
PDLI |
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.

In addition to the standard
ones that we look at every day in the semis, you have
(
QLGC |
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,
(
MXIM |
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and
(
BRCM |
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.

Other stocks:
(
UNP |
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,
(
CSX |
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,
(
TYC |
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,
(
TSG |
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,
(
EFX |
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,
(
AIG |
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,
(
FISV |
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,
(
GD |
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,
(
AVIR |
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,
(
GILD |
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,
(
BBOX |
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,
(
DGX |
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and
(
PSFT |
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.

Have a good trading day
and a wonderful weekend. I’ll be out tomorrow — see you all on Monday.

Wednesday’s S&P 500 five-minute chart
with
8-, 20-,
60-
and 260-period
EMAs

Wednesday’s NYSE
TICK five-minute chart