Cisco, Chips Lead Market Higher

“Limited visibility” is now a good thing. Cisco rose Tuesday despite that assessment from CEO John Chambers, and chip stocks soared after UBS Warburg called the bottom in the equipment sector.

The ISDEX surged 10 to 183, and the Nasdaq soared 58 to 1963. The S&P 500 gained 14 to 1144, and the Dow climbed 129 to 9893. Volume rose to 1.31 billion shares on the NYSE, and 1.89 billion on the Nasdaq. Advancers led 21 to 9 on the NYSE, and 22 to 13 on the Nasdaq.

Cisco rose 3% on the company’s analyst meeting. Chambers said the company had the biggest market share gains in its history last quarter. It said that November orders were “linear” – CiscoSpeak for “steady” – and in line with expectations, but that visibility is still not clear. Chambers continued to suggest that long-term growth may be in the 15%-25% range, much less than the 30%-50% the company had predicted until August.

Applied Materials and Novellus soared on the UBS call.

Avant! soared 63% on news that it will be acquired by Synopsis .

RSA Security climbed 3.7% after reaffirming guidance.

Ciena surged 10% ahead of an analyst meeting tomorrow.

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:

You say you don’t believe in the Plunge Protection Team, the secretive federal group that allegedly works to prop up financial markets during crises? Well, someone was boosting the Dow futures overnight (see first chart below). Of course, it could just be that a whole bunch of bullish futures traders couldn’t sleep, but nonetheless, it was a pretty good rescue of an index that was sitting on the brink (see second chart below). Critical support on the Dow is now 9850, although that trendline could reform at about 9780. First resistance is 9983. Today’s buying also saved the banking index (third chart) from yesterday’s breakdown, but the S&P closed just below its broken trendline, which should be at 1149-1150 tomorrow (fourth chart). If it can clear that level, it could be headed for 1163. First support is 1136, and then 1132-1133. The Nasdaq (fifth chart) cleared its 200-day moving average today and is sitting right beneath its 61.8% retracement level from the May peak, 1968.59. If the index can clear that level, it could be headed for 2080-2100. First support is 1949 (the 200-day moving average), then 1935-1941, 1922, 1915 (a biggie) and 1880.

Special report: For a free introduction to technical chart patterns and an overview of last year’s action in the stock market, visit,1785,2571_500051,00.html.

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