12:30pm (EST)

The market is struggling again today as the bears look to continue this week’s downdraft.  Futures were pointing towards a slightly higher open but the bulls couldn’t gain any traction despite a better-than-expected initial jobless claims number.  The Labor Department said claims dropped by 24,000 to 435,000 while the four-week average of claims fell 10,000 to 446,500.

Although the market has bounced off its lows, the momentum doesn’t appear to be there today for the bulls.  After last week’s breakout past resistance, we knew there could be a slight pullback in the market which is only naturally and we are seeing that.  We will go over these levels in a moment but the one catalyst that could spring the market higher for the rest of the week is Cisco Systems (CSCO, $24.30, down $0.05) which will be reporting earnings after the bell today.

The company is expected to post a profit of $0.40 a share on revenue of $10.7 billion.  Last time out, Cisco reported a profit of $0.43 a share on sales of $10.8 billion which was hit and miss.  Wall Street had expected them to earn $0.42 a share on $10.9 billion.  

The company has a history of “beating by a penny” but their revenue is what is going to determine the direction of the stock (and the market) on Thursday.  There is a ton of analyst coverage on Cisco as 48 analysts follow the company.  Most of them favor the stock as 18 have a “Strong Buy” recommendation while another 17 have a “Buy” rating.  There are 9 “Hold” ratings and 3 “Underperform” with no “sell” recommendations.  Their average price target for the stock is $28.

As we head to press, the Dow is down by 30 points to 11,316 but has traded to a low of 11,255 which the area of its previous 52-week high and should serve as support with 11,200 providing backup.

The S&P 500 is lower by 2 points to 1,211 and has tested the 1,200 level by trading down to a low of 1,204.  There is further support in the 1,170-1,175 region but don’t think these levels will come into play.

The Nasdaq has bucked the trend and is trading slightly higher as the index is up 3 points to 2,565.  Tech has traded to a low of 2,545 and there is strong support at 2,500 and then 2,450.  Cisco’s earnings will dictate if we get to 2,600 or test support on Thursday.

As usual, we have a lot of action happening in the Members Area so let’s get on it.  We will be back in the morning at 9am with another full update.