What The Charts Are Saying Based On My Best Tool In My Technical Arsenal

February 4, 2003
Dave Landry

On Tuesday, the Nasdaq opened lower and initially sold off.
It found its low late in the morning and generally worked its way higher, less an
afternoon dip, throughout the remainder of the day. This action has it closing
at 3-month lows and below the recently mentioned 1320 support level.Â

The S&P put in a similar performance.

The selling was broad based. It had many sectors either
resuming their rollovers or continuing there downtrends. These included (but not
limited to)

Insurance

Biotech

Telecom

Retail:

Restaurants:

I can go on and on, but I thinkÂ you get the picture.

So what do we do? Obviously, we remain in a bear market with
current and recent across the board selling. Therefore, the obvious play is to
continue to focus on the short side. However, I still see no need to get too
aggressive just yet based on the recent choppy action and the fact that we
remain in an event driven environment.Â Â

Looking to potential setups, Boston Scientific
(
BSX |
Quote |
Chart |
News |
PowerRating), in
the weak health services–medical instruments,Â looks poised to resume its meltdown out of a First Thrust.