| ShadowTrader Big Picture Market Analysis for February 28 |
| By Peter Reznicek |
Published
02/28/2006
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Stocks
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Unrated
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ShadowTrader Big Picture Market Analysis for February 28
 Good Morning, Traders. Looks like the volatility expansion that we predicted in yesterday's Big Picture and Sunday's video came true. The S&P 500 broke out to new 2006 highs but after consolidating at the highs of the day yesterday, succumbed to some late day selling which closed it just a hair below the prior highs of this year. Still, all in all, pretty bullish that we now have 2 out of the three major averages breaking out to clear territory for the year. The Nasdaq which has been lagging slightly also broke out over its downtrendline of 2006 and now has clearance up to 2332 which was the prior high water mark for 2006. We're not out of the water yet, but things are definitely improving. Retailers were strong (after Lowe's earnings smash), as were biotechs and software. Energy was weak and held things back a bit with Coal, and Oil Services feeling the most of the selling heat. Dow up 35.70, S&P ahead by 4.69 and Nasdaq tacked on 20.14. Near-term bias is now up as is the overall bias with the caveat that the Nasdaq is still slightly out of sync to the weak side. Markets are sometimes squirrely on the last trading day of the month, so use caution.
Peter Reznicek is Chief Equity Strategist for ShadowTrader.net a subsidiary of thinkorswim, and a Principal of the Prana Fund, a hedge fund. Mr. Reznicek can be reached at preznicek@shadowtrader.net.
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