A Weak Start To The Week

Stocks fell Monday on terrorism concerns, a weak leading economic indicators report and negative comments about tech stocks by Merrill Lynch.

The ISDEX http://www.wsrn.com/apps/ISDEX/ lost 3 to 129, and the Nasdaq dropped 39 to 1701. The S&P 500 fell 14 to 1091, and the Dow lost 123 to 10,229. Volume fell to 994 million shares on the NYSE, and 1.42 billion on the Nasdaq. Decliners led 19 to 11 on the NYSE, and 23 to 12 on the Nasdaq.

After the close, Qualcomm reiterated guidance and FairMarket announced a $2 million investment from eBay .

Software stocks led the selling during the day. Oracle , PeopleSoft and Microsoft fell on rumors of weak sales.

Finisar continued to fall on downgrades.

Advent fell on news of its CFO’s departure.

WorldCom gained after securing financing.

Computer Associates continued to get hit by accounting concerns.

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 couple of bearish evening star reversal patterns today in the Nasdaq (first chart below) and the BKX, the banking index (second chart). The pattern is a white candlestick, a doji star as we discussed on Friday, and then a red candlestick. The fact that the reversal came on a gap down adds weight to the reversal theory, and creates important resistance at the opening gaps (1726.89 on the COMPX and 912.69 on the BKX). 1696 is critical support on the Nasdaq, and 1680 and 1640 are first supports below that. The S&P 100 (third chart) is back below the major support of 548; was the close above that line just a fakeout? The S&P 500 (fourth chart) fell back below the important 1098-1100 level, but is holding 1088-1091 support. 1098-1106 is now resistance, and next support below 1088-1091 is 1074. 10,200 looks like very important support on the Dow (fifth and sixth charts). 10,150 and 10,100 are also support, and 9900 is critical. If 9900 falls, the Dow would look like a massive head and shoulders top in the weekly.






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

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