Another Rally Fizzles

Positive earnings news from GE and Dell got the market off to a strong start on Friday, but the rally fizzled on a much weaker than expected consumer sentiment reading and terrorism fears.

The ISDEX was unchanged at 102, and the Nasdaq slipped 1 to 1373. The S&P 500 lost 5 to 921, and the Dow fell 117 to 8684. Volume declined to 1.59 billion shares on the NYSE, and 1.99 billion on the Nasdaq. Decliners led 19 to 13 on the NYSE, and 18 to 15 on the Nasdaq.

Dell gained 4% after raising estimates by a penny but saying that business remains tough.

Juniper climbed 6% after beating and raising estimates, and Rambus gained 8% on in-line results.

Powerwave , Sonus and DoubleClick all fell on their results.

AOL slipped 4% on news that the company is looking for a new online division head. COO Robert Pittman is currently overseeing the division on an interim basis.

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

The Market Commentary will not appear next week, so we’ll give you broad levels to watch for next week’s trading. The Dow (first chart below) is stuck in a range between 8600 and 8850; whichever way it breaks should be worth at least a 250-point move. Since the consolidation also comes at the low end of an 810-point move in the Dow, a break to the downside could target 7915 (the September low was 8062). To the upside, 9000 and 9150-9250 are very important resistance levels. The S&P (second chart and third charts) faces an incredible amount of resistance between 945 and 953; a close above 970 would look bullish. 935 is first resistance, and first support is 900, and below that good support could be found in the 800-880 range. The Nasdaq (fourth and fifth charts) faces tough resistance in the 1400-1420 range, and 1315-1325 and 1335 are first supports. Strong support could be found in the 1200-1296 range. If the market continues straight down from here, it could be ready to bounce by mid-week, and Wednesday has some potential as a cycle turn date.




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