Watch These Levels

March 1, 2002
Gary Kaltbaum

We can start with the Nasdaq. Let’s take a look
at the chart.

Look how it has stair-stepped its way down with
a series of lower highs and lower lows. The three highs are at 1960, 1870 and
1780. You must notice that on every break below support, the Nasdaq shows no
ability to rally above the breakdown. Now…things only
get worse on a break below 1690.

Now, we already know that the
Techs have been a problem. That’s the easy part.
Here is the more worrisome problem. Have you noticed the last three days of the
Dow. Simply put…three days of 100-plus gains…only to reverse at the close.
This signifies one thing and one thing only. There is a
wall at the 10,200-10,300 range. This perfectly coincides with the Jan. 7
high and the congestion of the July/ August period of last year.

I try not to extrapolate (what a big word) too
much…but if the Dow…whichÂ has been the leading index…can’t go
higher, there is only one way it is going to go. Yeah, headed back down, To
where? Don’t know. But I do know that any weakness in the leaders is not going
to rotate into the laggards. With the Nasdaq already acting like Gary Condit’s
political career, things will only get worse.

I would continue to be as light as possible in
TECHLAND… and now be very suspicious of the rest
of the market. I wish I had better news for the longs out there but the market
is telling a different story.

Lastly, I do believe the next few days could
tell a big tale of the market. I don’t know how long things can hold up with all
this underlying damage and subtle or not so subtle intraday distribution
happening. So far, the NYSE is putting in a fabulous effort.
Watch the 1070 level on the S&P 500. A break below
and… (play “Taps” here).

Watch These Levels

BUY THE FEAR, SELL THE GREED

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