The Real Test

  • March 5, 2002
  • Dave Floyd

The
rally continues. Intraday trading has been excellent,
although yesterday’s close offered very few opportunities as the late-day price
action was very labored, with no quick volatility spikes. Obviously, the market
has a lot to digest after the current run, so yesterday’s action was not
uncommon.

The real test will come today at 10:00
a.m. EST with the release of the former NAPM,
now called the ISM report. It would be a
safe bet that the report should mirror the

ISM report from Friday. However, from a trading standpoint, a disappointment
would certainly open the floodgates for a quick downward spike. These are the
scenarios which I thrive on. As a result, do not miss the 10:00 a.m. release.

Again, there is not a lot to report
from the desk. Trading (HVT) remains
excellent, certainly long overdue, as a result that is my main focus, seizing
the opportunities while they exist. Not a whole lot of research or planning for
each day, just playing the price action.

From an intermediate standpoint, I am
neutral. I covered most of my shorts by last Thursday, and frankly, am not real
convinced about this rally…yet. I think we need a few more data points in
order for me to draw a definitive conclusion. It still remains a traders market.

An interesting observation: Perhaps it
is just sector rotation, but the one of the strongest groups of late,
The Retailers
(
$RLX.X |
Quote |
Chart |
News |
PowerRating), is showing some
signs of weakening. Again, you would not notice it by looking at the end-of-day
box scores, however, if you are trading any of these issues intraday, stocks
like Wal Mart
(
WMT |
Quote |
Chart |
News |
PowerRating), their participation
in rallies is tepid. My observations are that there are big sellers into each
intraday rally. Whether or not this is a reflection of what “big money” thinks
about the sector is anyone’s guess.  Just an interesting observation.

Key Technical
Numbers:


S&Ps  
Nasdaq
1173-75 (key resistance)  1580
1161-65 (confluence) 1568
1148 (confluence)   1545
1141      1520
1134-36    1507
1122-23   1493-96
1117   1479
1114 1471
1102-04  1463-64
  1446
  1430

As always, feel free to send me your
comments and questions.  I will be in
TradersWire around
11 AM EST to share thoughts and observations.


Dave

 

 

 

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