The Three Things This Market Has To Do

August 24, 2001
Dave Landry

On Friday, the Nasdaq lapped higher and kept on going for a
solid trend day higher. This action has it closing on its high.

Speaking of closing on its high, what’s interesting is that
the Nasdaq has flipped flopped from closing on its low to closing on its high
over the last 7 trading days. So, if you were wondering why the the stocks you
picked aren’t following through, maybe the answer lies within the index itself.

The S&P also put in a solid
performance.

So what do we do? No question
about it, Friday’s rally is impressive. There are only three things that I’d
like to see the market do before I get excited about it: follow through, follow
through and follow through. In his morning commentary, Dave Floyd said “Historically,
the week ahead of Labor Day is notoriously slow, so take the opportunity to gear
up for what I hope to be a very busy September.” I fully agree. Therefore,
I wouldn’t be too surprised if we didn’t see too much follow through next
week.Â I think the best thing we can do is to pick our spots carefully
until we see what the fall brings.

Looking to potential setups, Intermune Pharmaceuticals
(
ITMN |
Quote |
Chart |
News |
PowerRating)
has appears to be stabilizing near the area of its recent breakout. This action
suggests that its uptrend remains intact.