It looked and felt like the market was ready to roll over today but it was saved by some late day buying. The indices had all breached their newly established support levels of the October highs. What was looking like a victory for the bears quickly turned into a head fake as buyers pushed the indices back above their support levels. It seems like sellers got emboldened by the lackluster economic reports this morning but lost their nerve as the Cisco earnings report neared. Those bears that closed their positions were wise because Cisco had a great earnings report and popped up about 5% in the after-hours session, dragging a host of other tech stocks higher along with it. So it’s looking like it will be a rough morning for the bears tomorrow.
As for my trading, I’m seeing next to nothing that I would want to play here — long or short. So I’m sitting on the longs I initiated on Monday. If we get a really strong opening tomorrow I’ll be looking to take the money and run, especially if we reach NASDAQ 2,000.
I seem to remember that Cisco’s earnings news caused a big pop in the spring of 2002 that was the last rally before the big nosedive happened. This could provide the last blast the bears are looking for.
I smelt some bear fat burning in the last half hour.