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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Challo Jeregy who wrote (19336)	9/19/2001 1:10:30 PM
From: Challo Jeregy	Respond to of 52237

IBD - The Big Picture - Wednesday, September 19, 2001 Volume Still Heavy But Stocks Fail To Rally Investor's Business Daily With little good news to report on the corporate, economic and anti-terrorist fronts, stocks succumbed to afternoon selling Tuesday. Consumer prices inched up 0.1% in August, lower than the 0.2% rise economists were expecting. As seen in the past, inflation is still under tight control. In terms of good news, that was about it. Tuesday’s early rebound was mild. The Nasdaq, a 6.8% loser the day before, gained 1.6% within the first hour of trade, but failed to move higher. A second rally attempt later in the day fizzled at around 1:30 p.m. Eastern time. The composite ended down 1.5%, its 10th loss in 12 sessions. The Dow also rebounded in the early going, rising 1.1% intraday. But the blue chip index also rolled over in the afternoon and closed off 0.2% following Monday’s 7.1% slide. The S&P 500 gave up another 0.6%. The session after three major sell-off days — Black Monday on Oct. 19, 1987; Oct. 27, 1997; and April 14, 2000 — saw the indexes bounce back on furious trading. While there was no price rebound Tuesday, volume was still heavy. Trade on the Nasdaq receded 17% to 1.86 billion shares, although it was still higher than its 50-day average. On the NYSE, volume was above average, but still came nowhere close to Monday’s record-setting 2.37 billion total shares. The view from Corporate America grew scarier. United Airlines (UAL) reportedly will lay off 20,000 employees. The stock gained 1.49 points to 18.99 after Monday’s 13.32-point drubbing. American Express (AXP) fell 2.87 to 27.38 after it said third-quarter earnings would fall below Wall Street’s consensus view of 37 cents a share. The credit card giant wouldn’t give a specific target. Leaders in the leisure, insurance, auto and media industries also joined the bad news chorus. The SEC and securities regulators abroad are probing suspicions that terrorists behind the Sept. 11 attack on America had sold certain U.S. stocks short in the days before, Reuters reported. UAL and other airline stocks were in steep downtrends before Monday’s selling. More analysts are likely to revise their earnings estimates lower to the point that the country’s biggest companies will see profit drops as sharp as those seen during the 1990-91 Gulf War recession, says First Call’s research director Chuck Hill. Back then, the market waded through four straight quarters of shrinking earnings, with a 24.2% drop in the second quarter of 1991 being the worst. Right now, analysts see a 14.8% fall in the third quarter of 2001. But Hill expects the final figures will show a 21% squeeze. Someday, the selling and bad news will end. The monetary system is awash with liquidity. Fear is building in the market, as puts exceeded calls once again for a second straight day. The key is to be patient. Keep eyeing the stock tables and build a watch list of stocks with Composite Ratings of 95 or higher. Wait for the market to prove it’s ready to rally. Right now, few stocks are poised to break out should the market turn in the near future. We screened for stocks with at least an 80 for Earnings Per Share and Relative Price Strength Ratings, and a B or higher for SMR, Industry Group RS and Accumulation/Distribution. They also had to trade at least $10 a share, have an average daily volume of 25,000 shares or more, and be within 20% of their 52-week highs. Just 30 stocks — less than 1% of IBD’s stock database — made the list.