Option Investor
Market Updates

Bulls look a little vindictive

Printer friendly version

While today's trade saw some volatility in the first-half of the session, things have calmed down a bit as stocks have slowly started to trudge back near their highs of the session.

Perhaps recent comments from the U.N. Weapons Inspection team that they found "no smoking guns" in Iraq, has turned the tables a bit on what may have seen past Friday's a little more defensive from the bullish side, with shorter-term traders wanting to go home for the weekend a little "flat" in their account, just in case some type of surprise "war effort" was escalated against Iraq.

As mentioned in past commentary, the recent comments from the U.N. Weapons Inspection Team may not have totally eliminated the potential of a U.S.-lead war effort on Iraq, but the recent news may have shorter-term traders thinking that a war effort may have been pushed out on the calendar a bit.

A late session push higher in the Fiber Optic Index (FOP.X) 57.57 +7.6% to a new session high has raised the spirits a bit in the NASDAQ-100 Index Tracking Stock (AMEX:QQQ) $27.02 +1.19%, as it recently got back above the $27.00 level and today's R1 of $27.06 with an afternoon high of $27.26, and into the close there may be some posturing between bulls and bears to see just who may have the "power" to close above or below the $27 level. Bulls looked a little "vindictive" in the fiber optic sector with a defiant push to new intra-day highs, and it will be interesting to see if that carries over into the Q's into the close.

While there's still about 45-minutes left in today's trade, I don't think that today's volume levels in the NYSE and NASDAQ will be able to build to levels found yesterday (NYSE:1.5 bill, NASDAQ: 1.68 bill) as current volume on the NYSE is 1.25 billion share and slightly heavier at the NASDAQ with 1.4 billion traded.

The new highs versus new lows category doesn't look to be as bullish as yesterday's either, but despite this morning's slow start, traders have managed to push 81 stocks to new 52-week highs on the NYSE compared to 17 stocks hitting new lows, while NASDAQ shows 75 stock at new 52-week highs compared to 22 stocks at new 52-week lows. Yesterday's final tally and this indicator 134:11 on the NYSE, while NASDAQ's reading was 104:27.

On a broader scale of breadth, the NYSE currently shows advancers slightly outpacing decliners by a 17 to 15 margin, while NASDAQ breadth is similar at 16 to 14.

Of larger cap stock names, shares of Cisco Systems (NASDAQ:CSCO) $15.28 +2.2% are today's most actively traded and technical notes here has the networking giant challenging its December 2nd relative high of $15.46. Today's high trade of $15.46 is a matching high to that of December 2nd.

Traders may want to begin identifying some key stocks in their trading scenarios and benchmark the December 2nd highs. It was on December 2nd that the major indexes traded their recent relative highs before being turned lower. A simple benchmark to that date in your "key stocks" can give the trader a quick read on relative strength, as the major index are still below their December 2nd highs. As such, CSCO would be viewed as showing some relative strength on a near-term basis and may also be viewed as a "leadership" type stock that a technology bull would want to see lead higher and have a "pulling" effect on the broader group of technology stocks.

Jeff Bailey

Intraday Update Archives