THE NICK'S PICKS DAILY UPDATE
A Decision Point Publication
By TraderNick
As of market close 4/28/04
With no economic news today the market was left all alone with its fears, and
succumbed to them. Investors could see no reason to buy, but plenty of
reasons to sell, from escalating Mideast violence to the continuing obsession with
the Fed and the prospect of higher inflation and higher interest rates.
The Nasdaq fell back below the 2000 level, market breadth was ugly, and all
three major market indexes gave ST indicator crossover sell signals, from
stochastics to DMI to MACD.
The unknown and unseen are always more frightening than the known and seen,
and what really seemed to be bothering traders was the prospect of upcoming
economic developments. Tomorrow we get the early estimate of Q1 GDP (Gross
Domestic Product). Next Tuesday the FOMC (Federal Open Market Committee) meets to
ponder interest rates. And the following Friday we get the April monthly
employment report.
I can tell you what will most likely be reported in each of these instances:
(1) Q1 GDP will probably come in right around the estimated 5% growth rate or
higher. Too high and traders will be spooked that the Fed will raise interest
rates earlier than it wants to. Too low and they'll worry that the economy is
slowing too soon.
(2) The Fed will not move on interest rates at its May 4 meeting. It will
modify its policy language to a tightening bias.
(3) The April jobs number will come in weaker than expected, and weaker than
the strong March report. The market, wherever it is at the time, should rally
off of this, figuring that it gives the Fed has more time before it has to
raise rates.
What I can't tell you is how the market is going to react to each these
developments, except in the case of No. 3.
All this said, we're still in the trading range, only now we're working from
the top of it back toward the bottom. Daily TRIN closed above the 2.0 mark
today, a bullish indicator. Normally, I'd call for a bounce tomorrow on the basis
of this, but it's really going to depend on the reaction to the GDP number.
Today's Market:
S&P 500: Closed @ 1122.41 (-1.38%)
Comments On Open Positions:
[Reserved]
Trade well!
TraderNick
Nick's Picks Daily Update 4/28/04
Started by
TTHQ Staff
, Apr 29 2004 08:15 AM
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