Wednesday, February 04, 2009

CSCO Leads the Market Down After Hours

Top Line: The stock market looks weak which means only one thing...buying opportunity. Yes, we know it's getting old.

The weakness came back on Wednesday but it took until after hours for the NASDAQ to catch up with the Dow to the downside. That's when CSCO announced their earnings and disappointed the after hours market.

The market has a lot of fans that are bearish. The Dow did drop under 8000 Again today so let's see how long it takes for it to get back over that mark. Most technicians are looking for a solid break under 8000 giving the Dow a quick drop down to new lows. Just because the Dow dropped below the magic 8000 does not automatically guarantee a further drop to say 6000 or lower. If it wants to

We can understand the fear out there but the selling has been much lighter than we had during October and November. If you sold back then, do you now think that the market will give you a chance to buy them back at lower prices??? There are stocks right now that are cheaper than they were back in the fall but what we have to do is figure out if they are buys now, not if they're going down some more...

All day long we were thinking that the market was doing exactly what we wanted it to in order to show us that a low is in. The Dow was down but the NASDAQ was holding up very well going into the close. It is possible that the entire NASDAQ was hoping for good numbers out of CSCO which was holding up that index. That is possible but all were disappointed in the news and the index fell hard on the news. That took our main thought and flushed it. But, the concept is still there. The Dow looks weaker than the broader market which usually means that the market is done going down.

Can the market go down and make new lows? Of course it can but when it drops on news from CSCO it doesn't seem like a good enough reason to take the entire market down. What needs to happen is for the government to come to an agreement on the future of the stimulus package...we have been talking about this for a long time but the people don't like the results coming out of these discussions.

We are not giving you much this evening. Maybe the market will give us something on Thursday.

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