by Dave Landry, Director of Research
TradingMarkets.Com
December 17, 2003
Looking to the indices, on Tuesday, the Nasdaq generally worked its way lower throughout the morning. It found its low by mid-day and rallied for the reminder of the day. This action puts it right at its 50-day moving average.
The S&P outperformed the Nasdaq on both a relative and actual basis. This action puts it at a new closing high for the year.
So what do we do? Looking below the surface, the strongest stocks are chemicals, energy, and metals & mining (less gold and silver). On the downside, most of tech, even though it recovered somewhat intra-day on Tuesday, looks questionable at best. Outside of tech, areas such as retail (especially selected areas such as department stores) are in bona fide downtrends. Although I can't ignore the fact the S&P is at new closing highs for the year, I have a hard time believing that we can began a new leg up with only a few sectors in strong up trends.
T,his is especially true when I consider the fact that most of these areas are commodity related. With that said, other than those strong areas mentioned above, you might want to wait to see if other sectors can catch up before looking to buy. On the short side, continue to look for opportunities in those stocks that could be attempting to make a transition lower from high levels. This includes (but not limited to), computer hardware (most), the semis, selected retail, and the homebuilders.
,
No setups tonight.
Best of luck with your trading on Wednesday! |
