Panic Buying May Set In.

The stock market did the unthinkable today, when it dared to show positive performance after putting in such a strong day yesterday. Small Caps acted well, although Semiconductor action was lack luster. The NASDAQ while positive still underperformed the Dow Jones. Breadth was attractive at 16 advancers to 13 decliners on the NASDAQ and 17 to 15 respectively on the NYSE.

Networker's were particularly impressive today with Cisco (CSCO), Juniper (JNPR), Lucent (LU), and Nortel (NT) all racking up nice gains. Google (GOOG) seems to be breaking out and needs to be watched for potential significant upside. Stocks that lagged recently acted well today signaling a sense of desperation from traders to try and find safe exposure.

A positive day following yesterday's very strong action was the last thing the skeptics would want to see. We have been harping recently that most traders (including experts) are wrongly positioned for this recent rally. While the most logical course for the market to follow is to rest, we believe that panic buying is about to set in with the underinvested community. This would certainly follow suite for the stock market beast to suck in as many people as possible before doing the "nasty" to them.

If You Held a Taser to Our Head: Our NASDAQ target of 2190 still holds and we are comfortable with our slightly more than 50% invested position to play this expected panic move. We intend on providing the underinvested crowd with the shares they will so desire at the right moment.

See you tomorrow.

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