Sitting Tight

• January 11, 2002
• Dave Floyd

The market
will likely be pretty quiet after the first hour, as it awaits
Greenspan’s first speech on the economy since last Fall. As usual, there are a
number of possibilities as to what he may say with regards to the
much-talked-about “recovery.”  We will just have to wait to see
what he has to say. On that note, be incredibly selective this morning.

Yesterday was also one of those days
to be incredibly selective. Price action was, unfortunately, terrible yet again.
The one real good setup was fading the late-day spike up to 1161 (refer to a 5
minute March S&P chart). Since I do not try to buck trends, I missed the
trade, which is fine, it simply further strengthened my conviction of just how
important 1161 will be during today’s session.

On the news front I had heard some
rather startling comments this morning from Thomas Galvin at CSFB
regarding Intel
(
INTC |
Quote |
Chart |
News |
PowerRating). Mr. Galvin
expects Intel to meet expectations in the coming quarter but feels that all that
potential good news has more than been priced in. It is very refreshing to see
that perspective. The Enron
(
ENE |
Quote |
Chart |
News |
PowerRating)
debacle certainly may change the tune of analysts and auditors for good.

As mentioned earlier, the range-bound
nature of the market is frustrating, however, with Greenspan talking and
earnings pre-announcements due next week from a host of companies, the market
will revisit the big V — Volatility in earnest, I suspect.

On that note, I leave you with a quote
which adequately sums up my thoughts on trading in the current environment:

“It was never my thinking that
made the big money for me. It was always my sitting. Got that? My sitting tight! 
Men who can both be right and sit tight are uncommon.” — Jesse
Livermore            

Key
Technical Numbers

As always, feel free to send me your
comments and questions.  See you in TradersWire.

Dave