Thursday,  February 21, 2002
Leonard Mauck's Technical Analysis on the Nasdaq.

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Today's General Commentary

Oversold Composite Produces Strong Rally.    

The boys are very good at what they do, are they not?  Why do we say this?  Look at it this way.  If the market was not manipulated, and if the areas of rally tops and subsequent pullback lows were not predetermined, how do we call them so closely? 

Yesterday was another classic example of the seeming randomness of Nasdaq action that was, in reality, manipulation disguised by a veil of perfection. 

Wednesday's open soon found the Composite attacking our first designated resistance level of 1772 to 1776, falling short of the lower end of that area by a mere 1.10 points at 1770.90.  Within the first two hours of trading, we were attacking Tuesday's lows and we, at LSR, sent you an e-mail explaining that the lows were going to be broken.  We had wanted to see a successful test of those lows in order to identify a possible rally we expected to develop from an hourly model that we expected to turn up sometime during the session.  The boys, however had something else in mind. 

Later in the session, we alerted Premium Service members to the idea that the index would first trade down to the 1732 level, then possibly to the 1726 area.  As you will recall, we had designated the 1724 to 1726 level as the first support below Tuesday's closing area.  The boys did pretty much as we had expected.  They took the Comp into the 1729 area, falling short of 1726 by only three points.  By the time all of this had transpired, the index was ripe for a strong rally.  The hourly and all of the sub-hourly models were saying go go go!  The oversold nature of the Comp was all the fuel the a rally would need.   It should take no guessing for you to know where the index closed.  We called the level of resistance.  Remember?  Our resistance level of 1772 to 1776 was all the info you needed to have.  That close?  1775.57!  The high for the day, 1777.18, exceeded our zone by a point and a fraction.

We quickly informed you via e-mail alert that we were covering our model's KLAC short at a small loss, and that we would go long three stocks:   JNPR, PCSA, and WWCA.  The subsequent rally in the major indexes and our new long selections was breath-taking!  By the end of the day, our model's new stocks were up a minimum of 3 to 4 percent each.  In addition, Premium Service members were treated to two nice scalp trades.  One on KLAC for a $1.14 per share, and one on QLGC for 1.18 per share.  After Tuesday's huge winners, we followed it up with that.  Most definitely another great day for all concerned. 

The boys made it all possible.  It was their attempt to wash out the last few sellers that did the trick. By breaking yesterday's lows, they got the last few panic artists to throw in the towel.  It didn't happen to our members, however.  We told you it was all about inventory, and our information was on the mark once more. In addition,  we let you know of our model's buying at the bottom, with plenty of time left for you to use that information.  As bearish as we are on the economy, you have to believe that we like a rally's chances when we go long. 

You may thank us if you wish, but we are just trying to make it happen for you.  It's our job.  Unlike some momentum based services, we don't buy near the top and sell near the bottom.  We are timers and we like to do it the other way around.

If you can't make money with our information, you should give up the stock market, and take up evening walks.  Somewhat BORING, but very relaxing.  Here, in the fast-paced FIRST LOOK trading model, we are short when we need to be, and long when the conditions permit.  That type of formula makes for exciting times and dollars in the bank.

T/A:

As we had expected in yesterday's notes, the hourly model is now bullish.  The daily model is now neutral with a bullish bias.  We are now coming out of the worst oversold condition in the Comp since the post September 11th sell-off.  This could mean that we have seen the lows for the month of February.  It's still too early to make that determination, but it is very possible. 

First resistance :  1772 to 1776  (We are on it)

ELN:  We are long a 1/2 position @ 13.00. We will stay with this position for now.

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