CSCO earnings to drive the NASDAQ today

Wednesday gave us the early pullback into support and rallied nicely.
The market had priced in gridlock, with the Senate was undecided all day and now a resignation of Secretary of State Rumsfeld seemed to fuel the market today. Nice green day after a weak start across the broader markets, volume also increased leaving another accumulation day for the NYSE and Nasdaq. Volume started light and the first two hours of the day under paced yesterday, then we picked up steam and never looked back.

Crude surprised the market with less than expected supply. Closing up 90 cents at $59.83 on the day. Gold gave back some gains today after falling $9.40 to close at $618.30. Some skeptics are saying this is due to the democrats taking control of the House and the Senate is still pending, but I say it is corrective after the big rise. So we’ll look for this correction and continue to watch GLD to find support and fill some of these gaps it left open on the way up before stepping in again.

Microsoft’s late day announcement about Vista shipment dates fueled the big caps and gave the market a boost.
Anticipation of Cisco
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also set tech on edge and rallied late day. CSCO after hours reported good earnings and rallied up over 2.00 in the after hours session. Other earnings after the bell were mostly positive giving a nice bullish after hours tone.

Wednesday’s narrow range day left the market still at resistance. NDX and COMPX traded new 2006 highs and also closed at a new high for the year. SPX is just under the 2006 high and the Dow is just under the 2006 high, but did leave a new closing high on the year. We are at a critical place, volume has been good the past two days showing market participation, but we are at the line in the sand. This resistance is holding us and there must be a catalyst to move us.

CSCO is likely to ignite tech and get things moving. USUALLY this is a good thing for volatility and trading conditions. Early strength should be watched carefully for any signs of waning and our pullback could then come. Which would be healthy for the market and give next weeks options expiration week enough volatility and fuel to move us around. As I am finishing up my thoughts tonight I see that the Senate is now decided and the Democrats won Virginia which gives the Senate majority to both the House and the Senate now this is a first since 1994. Remember gridlock was priced in, Rep control was a rally and Dem control is a pullback short term. So that early strength we have to look carefully at for weakness and a nervous market.

Some earnings for the week of November 6 — 10: Thursday pre market — FS, HANS, JCP, KG, KOSP, TOMO, TOPT, TPTH, TXU, URBN, and after the bell — AIG, BRKS, ECLG, DIET, ENER, EXPE, KSS, SNDA, DIS, WFII. Friday pre market — IAG.

Economic Data for the week of November 6—11:
Thursday 08:30 Export Prices ex-ag., 08:30 Import Prices ex-oil, 08:30 Trade Balance, 10:00 Wholesale Inventories, Friday no data due out.

ES (S&P 500 e-mini) Thursday’s pivot is 1388.25, weekly pivot is 1373.75. Volume was great, the third highest on the December contract. 1388.25 is not only the pivot but it is the first retracement level off Wednesday’s trading range. Intra day Support: 1388.25, 1385.25, 1383, 1380.25. Resistance: 1392.50, 1395.25, 1398.50.

Compx (Nasdaq composite) closed +9.06 at 2384.94. Support: 2379.29, 2375.45, 2350.80, 2337.83, 2328.59. Resistance: 2413.52, 2437.74, 2468.59, 2474.10.

Good trading to everyone.

Teresa Appleton has traded equities and options for
nine years and futures for seven. She is founder and CEO of TradeLogic, LLC. For
more information about Teresa and the training she offers stock, options and
futures traders,

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