RealTime IT News

Bulls Get A Break

The bulls got a break on Wednesday, as the Dow bounced at the critical 9700 support level.

The ISDEX http://www.wsrn.com/apps/ISDEX/ rose 2 to 175, and the Nasdaq gained 39 to 1922. The S&P 500 climbed 8 to 1128, and the Dow added 17 to 9730. Volume rose to 1.44 billion shares on the NYSE, and to 1.87 billion on the Nasdaq. Advancers led by 19 to 11 on the NYSE and 21 to 14 on the Nasdaq.

After the close, everyone beat earnings estimates: Siebel , Broadcom , Cirrus , webMethods , QLogic , KLA-Tencor , SanDisk , Citrix , LSI , F5 , and Corning . But some reports were received better than others; QLGC and BRCM fell on their reports.

During the day, AOL rose and Microsoft fell after AOL unit Netscape filed suit against Microsoft seeking anti-trust damages.

Computer Associates , Novellus , FreeMarkets , and Emulex surged on their earnings reports, and Storage Tech , Applied Micro Altera , Motorola , Internet Security and Tellabs rose on their reports. But investors gave poor marks to Vitesse , Commerce One and EarthLink for their results.

Some technical comments on the market: Note: To see the charts in the text email newsletter, click on the internetstockreport.com story link at the top of the newsletter.

A day full of mixed signals. The indexes held critical support and turned up, so the bulls have a chance here. But sentiment is dangerously complacent, and Microsoft, IBM and GE all finished the day down. Critical support remains 9598 on the Dow and 1110 on the S&P 500. Below those levels, the market should fall at least another 5%-6%. The Dow (first chart) held 9700 support (9680) again today. Resistance on the Dow is 9775 and then 9830-9860. The S&P 500 (second chart) held above the critical 1110-1114 area again today, and even got back above 1125 support. However, the whole 1132-1140 area looks like resistance. The Nasdaq (third chart) faces tough resistance in the 1925-1935 area. If it can clear that, 1960 is next. 1860-1880 is strong support; 1880 held again today. Finally, a look at the Nasdaq summation index and its 20-day simple moving average (fourth chart). That indicator may give signals a little late, but it has been a good way to stay on the right side of the trend in this bear market, and right now it remains on a clear sell signal.

Special report: For a free introduction to technical chart patterns, visit http://www.internetstockreport.com/guest/article/0,1785,2571_500051,00.html.