What It Would Take For Me To Get Aggressive On The Short Side

February 7, 2003
Dave Landry

On Friday, the Nasdaq opened higher but quickly found its
high and began to sell off. Then, after some mid-day sideways chop, it generally
worked its way lower throughout the day.Â This action has it closing poorly
and at multi-month lows. Once again, the October lows remain a possible target.

The S&P also sold off hard to close poorly. This has it
at multi-month lows and breaking down out of its recent trading range.

So what do we do? The song pretty much remains the same:
there is broad based selling throughout numerous sectors (see recent
commentaries for more details here). Therefore, continue to focus on the short
side. However, once again, I would continue to keep it light based on recent
choppy action and the fact that we remain in an event driven environment. Be
patient, there could be an opportunity to get more aggressive on a continued
breakdown followed by a pullback (and ideally timing signals).

Looking to potential setups,Â Fit Third Bancorp
(
FITB |
Quote |
Chart |
News |
PowerRating),
in the weak banks (and weaker regional banks–mid-west, plotted below), Looks
like it has the potential to resume its downtrend out of a pullback.