Taking A Breather

The S&P 500 surged early, and the market made new highs in some strong
stocks, with EMC (EMC), Gap (GPS), Best buy (BBY), America Online (AOL), Amgen (AMGN), and
Worldcom (WCOM) leading the way.

But the market rolled over later,
and the S&P closed in the bottom quarter of its daily range (and below its open). The S&P has
had a
five-day run from 1216 to 1294 (+6.4 percent) and it’s time to rest.
A move below yesterday’s low of 1274.80 would give good entry on the short side, but I’d
use that low as a stop if the trade goes in your favor.

According to Greenspan and group, the news on inflation (or anything else, for that matter)
is nothing but positive. He sounds determined not to let anything bad happen to this market
under his regime. We’re all rooting for him.

Target Stocks Of The Day  Patterns in strong institutional stocks with good
liquidity are still your best plays. Today, strong momentum stocks with patterns near highs
include Worldcom [WCOM>WCOM], Oracle [ORCL>ORCL], ADC Telecommunications [ADCT>ADCT], NTL
[NTLI>NTLI], Uniphase [UNPH>UNPH], Network Appliance [NTAP>NTAP], and Medimmune [MEDI>MEDI].

Based on this very strange tape, you could get entry on both short side (with the SPDRs) and
the long side (in one or two of these stocks). Keep your stops tight.

Editor’s note: If you want to learn more about Kevin Haggerty’s trading strategies, click
on the link below to go to his new series of tutorial articles.