Technical analysis for shorts & longs Message Board

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Strategies & Market Trends : Technical analysis for shorts & longs

SPY 690.40

-0.5%

Jan 14 4:00 PM EST

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To: Johnny Canuck who wrote (35718)	12/31/2001 12:48:06 AM
From: Johnny Canuck	Read Replies (1) of 69761

Updated: 31-Dec-01 General Commentary The end to a painfully slow, holiday-shortened week. Given that institutional accounts will be away from the shop again on Monday (still not sure why the markets will be open for a full day when there will be no one around to trade), the small-caps that have dominated the action this week will likely continue to garner attention. One theme that should receive some play over the next week is the (re)entering of stocks of potentially viable technology names that have underperformed the market due in part to tax-loss selling pressure. Names that come to mind include Avici (AVCI 2.74) and Commerce One (CMRC 3.55). In light of the aggressive advance made by the indices in the final quarter of the year, we are not hearing much talk of a January effect rally. However, would expect any meaningful uptick over the next two weeks to be played up as a function of this phenomenon. The hint of such a run will likely put the fast money on the offensive, igniting multi-session advances in stocks exhibiting technical strength. It will be important to be stock-specific when selecting these set-ups. The cautious approach would be to come in with a list of candidates that performed well in the previous session, and only consider entering those names that continue to exhibit strength in the first two hours of the second session. Looking ahead to earnings season, we expect traders to be lying in wait to fade earnings news. You know, the old buy the rumor, sell the news trade. One set-up favored by traders is the gap up on seemingly solid results, followed by a slide into negative territory. Once a "gapper" turns red, it usually does not come back. Damon Southward -- Please feel free to direct comments to dsouthward@briefing.com

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