Intel rose Monday on a transistor breakthrough, and Amazon.com soared on better-than-expected holiday sales.
The ISDEX http://www.wsrn.com/apps/ISDEX/ surged 8 to 186, and the Nasdaq rose 38 to 1941. The S&P 500 added 7 to 1157, and the Dow climbed 23 to 9982. Volume was unchanged from Wednesday’s pre-holiday session at 1 billion shares on the NYSE, but rose to 1.7 billion on the Nasdaq. Advancers led 16 to 15 on the NYSE, and 21 to 15 on the Nasdaq.
After the close, Tech Data rose on better than expected earnings. At 15 times earnings, it’s still one of the very few inexpensive technology stocks.
During the day, tech stocks were strong despite valuation downgrades and lowered allocations from three major brokerage firms.
Amazon soared 34% on better-than-expected holiday sales. The stock cleared its 200-day moving average at 11.70, which should now be support. Yahoo
surged 15%. Yahoo also cleared its 200-day at 16.71.
Intel rose .81 to 31.87 on a dramatic breakthrough in transistor technology.
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The SOX (first chart), the semiconductor index, surged back into its broken rising wedge today, a bullish sign if it can hold. That lower SOX trendline should be at about 525 tomorrow. However, Microsoft (second chart) has had no bounce since gapping down out of a bearish rising wedge last Wednesday. Mr. Softie will have to surge above 67 very soon to negate that breakdown. It will be tough for the Nasdaq to go far without its biggest stock. Another problem facing the market in general is that it is overbought in almost any timeframe, one reason that recent gains have been so labored. The Nasdaq (third chart) took out critical 1934.69 resistance today, and could have upside potential to 2080-2100. However, the index still has one heck of a resistance level just ahead: 1968, its 200-day moving average and 61.8% Fibonacci retracement level. No Nasdaq rally has yet to exceed that Fibo target, so some sort of pullback is likely first if the index makes it that far. First support is 1900-1910, and then 1840-1860. The Dow (fourth chart) faces resistance at about 10,050 and critical resistance at 10,093-10,120. Support is 9900 and then 9800. The S&P (fifth chart) faces critical resistance in the 1164-1173 range. Support is 1146-1152. Finally, it’s been some time since we posted the CFTC data on futures positions, mostly because it hasn’t changed: the big commercials, the so-called smart money, remain short the Nasdaq and S&P. In one interesting change, however, they are very close to going long gold. All in all, the bigger picture remains bearish. The next cycle turn window is December 3-5, followed by a major one a week later: the start of a Puetz crash cycle and what Chris Carolan (The Spiral Calendar) has projected for some time to be the final bull market high. Mid-December to early January could be a time period worth paying attention to.
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