9:00am (EST)

I got a bad feeling on this one all right?  I mean, I got a bad feeling! –   Sgt. Barnes, Platoon

The bulls finally made it back into the green on Wednesday after two days of selling pressure but it appears it will be short-lived.  From the opening headline to today’s quote of the day, you can tell the market isn’t looking good for the bulls this morning.

The Dow spent much of Wednesday in the red before managing to finish with a 10 point gain to close at 11,357.  Boeing (BA, $67.07, down $2.18) weighed heavy on the index as the blue-chip fell 3% after halting test flights of its 787 Dreamliner.  This was in response to an incident that happened on Tuesday after an electrical fire on one of its test planes forced an emergency landing.  Although it’s too early to tell if the incident will affect the plane’s delivery schedule, which is already 3 years behind schedule, and just another setback Boeing didn’t need.  The 3% drop accounted for -17 Dow points.

The S&P 500 managed a 5 point pop and settled at 1,218 while the Nasdaq added 16 points, to finish at 2,578. 

We expect Tech to take a beating today after Cisco Systems (CSCO, $24.49, up $0.14) pulled up lame with its quarterly earnings. 

The company reported a profit of $1.9 billion, or $0.42 a share, versus $1.8 billion, or $0.30 a share, in the year earlier period.  Revenue was up nearly 20% to $10.8 billion.  Wall Street was looking for $0.40 a share with a revenue forecast just shy of Cisco’s beat.

Where Cisco blew it was their guidance for the current quarter in which they said they expect sales in between $10.1-$10.3 billion.  The suit-and-ties were looking for sales of $11.1 billion.

We told you yesterday the company would at least beat estimates by a penny but we were a little worried about guidance (just like our buddy Barnes was).  This is a huge disappointment…and a buying opportunity.  Shares plunged in after-hours trading last night, falling over $3, or nearly 13%, to $21-and change.  This morning, the stock is at $20.30, down $4.19.

We may use the sell-off to establish a covered call position but we would need to buy the stock first.  For those of you unfamiliar with this strategy, you write (or sell call options) on stocks that you own in order to bring in income and to lower your share cost.  For every 100 shares of a stock you own, you can sell a call option; collect the premium, and do it over and over until eventually the stock pays for itself.

Of course, a lot of factors are involved in making a return on a covered call investment as the stock could get “called away” from you if the price is above the strike price you sold.  However, they are GREAT strategies on stocks you own or would like to own which you can also do by selling put options.  But that’s another story…

Bottom line.  Cisco is going on sale today, folks.

As we head to press, Dow futures are lower by 56 points to 11,246 while the S&P 500 futures are off by 8 points to 1,206.  The Nasdaq 100 futures are down 21 to 2,153.  It appears the bears will have the early edge and we will be looking for the Dow to hold 11,200 while the 1,200 level will come into play for the S&P.  After a 15% rally from the August lows, the market was due for a pullback but we would like to see support hold today.  Subscribers, check the Members Area for the updates.