Cisco Tops Estimates

Cisco Systems rose after hours on Monday after beating estimates.

Stocks rose during the day ahead of Cisco’s report and the Federal Reserve’s meeting on interest rates tomorrow. Traders are divided between expectations for a 25 or 50 basis point rate cut. The decision will be announced at 2:15 p.m. Eastern time.

The ISDEX http://www.wsrn.com/apps/ISDEX/ surged 8 to 151, and the Nasdaq rose 47 at 1793. The S&P 500 climbed 15 to 1102, and the Dow rose 117 to 9441. Volume declined to 1.1 billion shares on the NYSE, but rose to 1.7 billion on the Nasdaq. Advancers led by 20 to 10 on the NYSE, and 21 to 14 on the Nasdaq.

After the close, Cisco beat pro forma estimates by 2 cents with 4-cent earnings, revenues topped estimates, and the company projected modest sequential growth next quarter. On a GAAP basis, the company lost 4 cents. The results boosted competitors like Juniper and Ciena . Cisco broke its May downtrend during the day ahead of the results (see chart below):

Also after the close, Register.com and TMP Worldwide also beat estimates.

Stocks rose during the day on optimism ahead of Cisco’s report and the Fed meeting. Juniper was one winner, rising 3.10 to 22.58 on positive analyst comments.

Microsoft finally cleared its 200-day moving average at 62.42, even though some state attorneys general said they may oppose the company’s antitrust settlement with the Justice Department. The states will respond in the case tomorrow morning.

Sun Microsystems rose .62 to 12.06 after JP Morgan added the company to its focus list.

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

The Nasdaq 100 (first chart) broke its downtrend today. The Nasdaq (second chart) won’t run into its downtrend line until 1900 or higher. First resistance is the 1817-1828 level, and first support is now 1792. The Dow and S&P (third and fourth charts) are both forming bearish broadening patterns, but could have upside to 9500-9700 and 1115-1125, respectively, before hitting resistance. Higher highs and lower lows within the same pattern is almost always bearish, because it reflects out-of-control trading conditions. First support is 9350-9400 on the Dow and 1092-1100 on the S&P. Finally, a quick look at the Elliott Wave count using the Dow (fifth chart): we are either entering wave 5 up in the A wave of an A-B-C correction, which means this rally could continue for quite some time, or we have already completed A and B and have begun the final leg up, the C leg. Under either alternative, a strong pullback should come after the current leg up is completed. Wednesday is a cycle turn date, give or take one day.

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