CSCO reports its Q4 earnings after the close today. Their
forward guidance could be an indicator of near term market
direction.
S&P/AMEX New highs & lows looks rather weak......
finance.yahoo.com
S&P currently @ 964.97, the low of the day. A close below
970 & CSCO not pointing to at least mostly blue skies ahead
could mean more down near term.
BWTHDIK?
10:46 ET S&P 500 slips to new session low : -- Technical -- The index staged a solid recovery after nearing important support yesterday but it has been unable to build on this recovery attempt with fresh session lows recently established. Initial supports are in the 972 and 970 area (yesterday's low 966.84) with the more important floors at 965 (Aug 2002 high) and 962 (Aug 2002 closing high/July low). Intraday need sustained gains back above the 978 and 980 levels to improve the very short term pattern.
11:06 ET Dow Industrial Avg : -- Technical -- Disappointing action thus far for the index as it has failed to build on yesterday's reversal day with negative trade dominating. The index has held near short term support in the 9100 area (congestion, 50 day simple mov avg) and pushed higher but need to see sustained follow through beyond initial resistances at 9150/9155 and 9185 to help improve the short term pattern. Failure leaves the door open back to supports at 9080, yesterday's low of 9048 and its 50 day exp mov avg (9038).
13:25 ET Nasdaq Comp near session lows : -- Technical -- Index unable to follow through on the morning recovery attempt and build value above its 20 day exp mov avg (1711) with prices back near the low of the day and the 30 day exp mov avg (1696). A daily chart of these averages shows the important role they have played during corrections since the market bottomed. Failure to stabilize above these levels exposes the 1686 barrier (June range top) to yet another test with a sustained penetration arguing for a more substantial correction of the spring/summer surge.
15:32 ET Nasdaq Comp slips below support : -- Technical -- Index edges slightly below support at the June range top (1686) with the next short term levels of interest at 1675 (Mid-July low) and 1668 (50 day simple mov avg).
12:15 ET Bond Market Update : Treasuries are trading just off their lows ahead of the Treasury's upcoming 3-year note auction. Ten-year note presently down about three-quarters of a point to yield 4.38%. After beginning the day modestly lower, Treasuries plummeted after the stronger-than-expected headline number from the ISM Services Index. Bonds bounced back upon recognizing the favorable "prices paid" component of that index, as well as the announcement by Challenger of 43% more layoffs in July vis-à-vis the prior month. However, the market has continued to stumble heading into the 13:00 ET auction deadline. Market may see a little bounce after the completion of the auction, but remember that we have a 5-year note auction tomorrow and a 10-year note auction Thursday, too.
15:16 ET Bond Market Summary : Treasuries are trading near their lows for the day shortly after the futures close. Ten-year note presently down a point and a quarter to yield 4.45%. Anticipation of the Treasury's 3-year note auction weighed on the market all day, and the market headed south without restraint after the completion of the "sloppy" auction. As well, stronger-than-anticipated ISM Services Index did nothing to help the bond market. Nothing at all on tomorrow's economic calendar; Treasury to auction $18B of 5-year notes tomorrow, as quarterly refunding continues.
14:30 ET Floor Talk : Tough to find anyone willing to say that Tuesday, Aug 5, is a good day to be long equities. On very short-term basis, traders discouraged by the inability of the positive ISM data to get the market going. Also, intraday reversal in Treasuries (10-yr -1 1/32, yield 4.419%) has dashed hopes that the bond would stabilize here, and allow Financials to climb out of recent rut. And, as we've commented on in recent days, trading desks continue to bring up point that the technicals are reading overextended. Overall, institutional accounts seem to want to be short, and the only thing that has kept them from moving aggressively in this direction is the propensity for the market to pop on Saddam rumors, sector upgrades, and the such. Fact that a name like CSCO got almost no mileage out of upgrade just ahead of earnings is leading some accounts to think that it may be finally safe to put on short positions without fear of a backbreaking squeeze. We'll see.
15:24 ET Cisco Systems Earnings Preview (CSCO) 18.84 -0.42: -- Update -- Cisco Systems is scheduled to report Q4 results after the close, with consensus ests standing at $0.15 in EPS and $4.68 bln in sales. Merrill Lynch expects the co report in-line EPS, to slightly exceed their rev est of $4.7 bln, and to have a book-to-bill above 1, fueled by improvement in the U.S. enterprise mkt and led by Federal and strength in the SME mkt; in addition, firm believes the mkt will be primarily focused on the co's rev outlook, which should show a 2-3% sequential improvement for Q1 (factoring in the Linksys acquisition). On the other hand, Fulcrum expects CSCO's guidance to be conservative, and expects mgmt to guide Q1 revs to be flat sequentially and to provide a cautious near-term outlook for its core biz while speaking positively of its new opportunities (especially on SANs and service provider space). |
