Skittish Ahead Of The Fed

January 30, 2001
Dave Landry

Each evening we focus
on the most interesting aspects for the upcoming trading
day. The comments are based on observations of the nightly
updates of the Stocks/Sectors and Market Bias pages. They
are provided for educational purposes only and are not
intended to be direct trading advice. Also, keep in mind
that these remarks are made up to 12 hours in advance of the
markets opening. Therefore, overnight events may alter the
outcome of these observations.

The Nasdaq did
nothing on Tuesday. I suppose I could do a lengthy description
of how the market is drifting on pre-Fed trading but I don’t want to bore
you any more than the market has already.

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The Dow did have a nice break as
suggested by a low volatility situation in Monday’s March futures. See Monday’s
Futures Outlook for more information here (don’t read tonight’s,
I rambled on a bit about cows). I’m not telling you this to be smug. Ok, maybe a
little. My point is you that should watch everything–stocks, futures, cash, and maybe
even cows.

So what do we do?
I’m a little skittish about establishing new positions ahead of the Fed and I’ve been in trailing stop and taking profit mode–letting the market
take me out of positions.

With this in mind,
here are some potential setups:

Merrill Lynch
(
MER |
Quote |
Chart |
News |
PowerRating), mentioned recently, still looks
like it has potential.

Pittson Brinks
(
PZB |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Highs List, looks like it has the potential to rally out of a two-step
pullback.

Elantec Semiconductor
(
ELNT |
Quote |
Chart |
News |
PowerRating), mentioned Monday night,
appears to be rallying out of a big picture low-level cup and handle. Just don’t
overstay your welcome as it will likely hit resistance around the handle highs
(58).