Start Without Me, I’ll Be Late For The Party

March 1, 2002
Dave Landry

On Friday, the Nasdaq opened firmer and rallied for a solid
trend day higher. This
action has it closing well.

The S&P also put in an impressive performance. It has
now reached the top of its recent range.

The media was quick to celebrate the new bull market after
just one up day. Right when I was about sick of hearing how great things are,
Oracle
(
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PowerRating) stepped in after hours to take away the punch bowl from the
party.Â Â Â

So what do we do? As you probably know by now, I’m not
smart enough to call bottoms. I like to see some sort of sustained rally and
then, and only then, do I begin to get excited. So, with that said, I can
assure you that I’ll be late for the party. Friday’s rally is impressive. No doubt about that. However, although I think there was some legitimate buying, a
lot of it seemed panic in nature, a.k.a. short covering. This, the Oracle news,
the fact that the market is overbought, the fact that most of tech remains in a
downtrend, the fact that the VIX approaching levels not seen since last summer
and the fact that I’m more of “wait and see” kind of guy is keeping me
cautious. In fact, I think this could set up some opportunities on the short
side in tech very soon. Don’t fight the tape though, wait for the opportunities
to come to you. This way, if you are wrong, it won’t cost you anything.

No setups tonight. Be patient, if this thing doesn’t follow
through we could get a plethora of setups.Â

Coach, What Now?

Lately, I have been doing a “walk through” on Coach Inc.
(
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PowerRating), a stock mentioned recently (see archives on the right side of this page for more details).Â
When I last left off, I had discussed that it should not come back into the area
of its breakout (i.e. the breakout should hold). Therefore, this area, circa
47(a) would be a good place for a trailing stop. For now, let’s assume this stop
stands. If it continues to build a base above the breakout level, we will look
to tighten further.