Techs Up Despite Juniper Warning

Technology stocks finished the first quarter on a positive note despite an earnings warning from Juniper, which itself gained 6%.

The ISDEX rose 2 to 160, and the Nasdaq gained 18 to 1845. The S&P 500 added 2 to 1147, and the Dow slipped 22 to 10,403. Volume declined to 1.13 billion shares on the NYSE, but rose to 1.66 billion on the Nasdaq. Advancers led 17 to 14 on the NYSE, and 20 to 15 on the Nasdaq.

Juniper led a strong telecom equipment sector. Lucent , Nortel , Ciena and Cisco all gained. Sonus didn’t fare as well, however, falling 7% on its warning.

Taiwan Semi boosted CapEx spending by more than $800 million, sending Applied Materials up 4%.

EMC gained 7% on positive analyst comments to lead a strong storage sector.

Check Point slipped 2% on Morgan Stanley comments that business at the company appears risky.

Adobe gained 3.7% on positive analyst comments.

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.

A nice little breakout on the Nasdaq today (first chart). That index should now be headed back to the recent highs around 1930-1950, but faces a lot of resistance along the way, most notably at 1853, 1870, 1880, 1900 and 1910. 1830-1835 is now critical support. The Dow (second chart) failed at an old breakdown point at 10,500, but held 10,400 support. Support is 10,400, 10,350, 10,300, and critical support is 10,275. Resistance can be found at 10,425, 10,450, 10,475, 10,500 and 10,550-10,575. The S&P (third chart) failed today at an old downtrend line at 1155. The S&P has support at 1138-1142 and 1131, and resistance is 1148, 1150, 1155 and 1160. Given all the cross-currents at play in the market this week, it’s not surprising that the market traded both up and down today. Monday should be an up day; the first day of April is rarely down, although last year was a notable exception. Next Friday and the following Monday (April 5 and 8) will be two days to watch because they coincide with the first big Bradley cycle turns since early January. Complacency remains at dangerous levels; note the VIX versus the S&P 500 (fourth chart). The VIX, the options volatility index, has continued to fall while the S&P has been locked in a range, complacency that could cap any April rally and make a May-June correction all but inevitable. Today marked the end of a strange quarter. The Nasdaq was down about 5% on the quarter, but the SOX, the semiconductor sector, was up more than 10%. And the number one performing sector for the quarter? Gold stocks, up more than 40% since January 1 (see fifth chart below). From the looks of that HUI chart, mental stops on gold stocks should be set at about 93 on the HUI; a break back below that upper trendline would be a negative. With Japanese deposit insurance set to be capped on Monday, next week could be another interesting one for the gold sector.





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