Whetting Our Appetites

• August 17, 2001
• Dave Floyd

Yesterday’s session
provided ample trading opportunities, typical when the market tests
contract lows (1168.5) then makes a run to the highs of the day. I expect there
will be similar opportunities today, although options expiration can always
throw traders a curve ball, so keep an eye out. The rally was led by chip
stocks, stocks like Texas Instruments
(
TXN |
Quote |
Chart |
News |
PowerRating), Analog Devices
(
ADI |
Quote |
Chart |
News |
PowerRating),
Applied Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating) and National Semiconductor
(
NSM |
Quote |
Chart |
News |
PowerRating)
offered great trades in the afternoon, as they were greedily snapped up on each
pullback in the futures.

I can’t help thinking that this market is on the
verge of a major move that will set us up for a much more active phase of
trading. Each day the market whets our appetite, flirting with lows and support
levels, only to have buyers come in for the "rescue." With the weak
dollar and Mideast tensions, it is only a matter of time until we get the
welcomed capitulation, but probably not until after next week’s Fed meeting.
Continue to mind the "Key Technical Numbers" (KTNs for future
reference), as they are the only thing offering great trade setups.

Key Technical Numbers:

Keep an eye on the following numbers for these
stocks, as they too should offer good intraday setups off these numbers: 
Texas Instruments (TXN) is trading around its 50-day average of 33.94, National
Semi (NSM) around its 20-day of 31.48, IBM
(
IBM |
Quote |
Chart |
News |
PowerRating) around its 20-day of
106.14, Nvidia
(
NVDA |
Quote |
Chart |
News |
PowerRating) around its 50-day average of 83.78, and Bank America
(
BAC |
Quote |
Chart |
News |
PowerRating) around its 20-day average of 62.68.

Have a great weekend. As always, feel free to
send me your comments and questions.

Dave