This Market Is Resilient

• November 2, 2001
• Dave Floyd

You can’t
keep a good market down. While this is certainly not what one would
expect on the heels of some horrific economic news, the technicals tell it like
it is: This market is resilient. The S&P and Nasdaq futures continue to
dance between the 20- and 50-day
moving averages. Until a clean break is made either way, expect more of this
grind-up, grind-down price action. Additionally, the S&Ps are forming nice
support at 1050 — this number will be critical going
forward.

On the “scalping” front, the
recent releases of economic data have been a windfall intraday as the indices
gyrate up and down, offering tremendous opportunities for nimble fingers. While
the moves up and down in the Futures have been a little less than the standard
range (3-5 points), traders who are quick — and more importantly, not greedy —
can trade effectively for 10-20 cent moves on the underlying stocks. I expect
that the release of more economic data this morning will keep the markets active
yet again.

The bullish tone in the market may
persist as we approach the Fed meeting next week. Most participants are
expecting the Fed to continue to “push on a string” and lower rates
yet again in order to persuade unemployed, debt-ridden consumers to consume more
goods and services. As of right now, it is hard to argue with this approach as
it appears to be keeping the market out of serious trouble. How long it will
last is another story.  Again, have an opinion, but let the charts dictate
your trading decisions.

On that note, I am keeping a very
close eye on some recent short positions I established ahead of earnings season
and this week’s economic numbers. With the market having major mood swings each
day and the indices appearing to find support, I am beginning to re-evaluate
these positions, although my stop loss orders will probably make the final
decision for me, unless it appears as though they will be taken out anyway.

So positions aside, the intraday
opportunities are there, step up and take full advantage.

Also keep an eye on 9254 on the Dow.

Key
Technical Numbers

I will be in TradersWire
today sharing with you my observations. Please note that additional KTNs
are highlighted in TradersWire
during the day that are not part of the my daily column. Many times, these
numbers offer great intraday setups, so sign in and interact with some
exceptional traders. As always, feel free to send me your comments and
questions.  

Have a great weekend.

Dave