RealTime IT News

Stocks Rally Just Because

Stocks rallied on Wednesday for no other reason than it was time to stop going down.

The ISDEX http://www.wsrn.com/apps/ISDEX/ surged 13 to 223, and the Nasdaq added 38 to 2031. The S&P 500 climbed 10 to 1223, and the Dow rose 50 to 10,647. Volume rose to 1.3 billion shares on the NYSE, and 2.1 billion on the Nasdaq. Advancers led 18 to 12 on the NYSE, and 19 to 18 on the Nasdaq. For earnings reports, visit our earnings calendar at http://www.wsrn.com/apps/earnings/internet.xpl and reported earnings at http://www.wsrn.com/apps/earnings/ireported.xpl. For after hours quotes and news, visit our after hours trading site at http://www.afterhourstrading.com.

There were no major earnings after the close for once. Sanmina and Verity were the biggest names to 'fess up after the bell.

During the day, Tellabs plunged 5.02 to 16.18 after delivering the latest dismal outlook from a telecom equipment company, warning of a breakeven quarter, 29 cents below estimates. More cautious comments from Cisco caused that stock to slip 14 cents to 16.50. Jabil lost 1.25 to 23.86 after topping estimates but issuing an earnings warning.

Qwest , off 1.25 to 30.02, defended itself against a Morgan Stanley downgrade based on accounting issues and reaffirmed estimates.

IBM lost 1.75 to 113.09 on concern about the company's earnings.

Network Appliance lost 1.19 to 12.10 on a Merrill Lynch downgrade, but Ciena managed to climb .73 to 37.47 despite a Merrill downgrade.

RealNetworks surged 1.60 to 11.90 on an XML-based media initiative called XMCL.

Some technical comments on the market: Note: We include charts in the technical market commentary. If you can't get the charts via the e-mail newsletter version, try this link: http://www.afterhourstrading.com/column.html

A nice recovery today, and at a very interesting juncture: at 1973 on the Nasdaq, which marks both the 50% retracement of the 1619-2328 run and the index's broken September downtrend line - http://cache.wsrn.com/images/AHT/compx06202.gif - which is now important support. However, there was no real buying pressure today, as measured by TRIN readings that were above the important .80 level all day on both the Nasdaq and the NYSE. Tomorrow and Friday mark a turn window (new moon and 55-day cycle on the Nasdaq), so that turn could be up. However, tomorrow also marks the start of a Puetz crash window, but the key dates for that will likely be June 26-July 10. The Nasdaq (first chart) could be forming a falling wedge; it won't take much upside or downside to break out of that pattern. 2100 is key resistance, and 1973 is important support. For the S&P 500 (second chart), support is 1200 and key resistance is 1250. The S&P still looks like it is forming a bear flag the last few days, a sign of potential further downside; a strong upward move tomorrow could negate that bearish sign. For the Dow (third chart), 10,560 is first support, then 10,475. 10,700 is first resistance and 10,870 is critical resistance.

Special report: For a free introduction to technical chart patterns and an overview of last year's action in the stock market, visit http://www.internetstockreport.com/guest/article/0,1785,2571_500051,00.html.