9:00am (EST)

The market started the week off with another mixed Monday as the broader market fell while Tech and the small-caps showed some strength.  The bears continued to test support on Tuesday but the bulls showed some signs of life after one of the Fed Heads said current economic data could push back the Fed’s stimulus package plans of maybe tapering in September further out.  Tech also got a lift with Apple’s (AAPL, $502.33, up $4.42) push towards $500.

The bears were back on Wednesday but didn’t go away as the Dow fell triple-digits for the first time in 31 sessions while closing below key support.  The Financial stocks showed some strength and the VIX remained below 13.50 providing hope for Thursday but no such luck as the bears had their best day in 6 weeks.

Much of the pullback can be blamed on Cisco Systems (CSCO, $24.27, down $0.22) and its earnings report.  The company beat Wall Street’s estimates by a penny but cut 4,000 jobs and sandbagged their numbers for the current quarter.  The news sent futures sharply lower Wednesday night and we warned the next wave of support would be tested.

The bears pushed the indexes right on our downside targets and while the bulls were looking for a slight rebound on Friday, there was continued weakness although the losses were minor.  The Nasdaq closed within 3 points of our downside target while the S&P 500 came within 5 points.  The Russell 2000 overshot our 1,025 target by a point.  Folks, you can’t call the market action much better than that as we were able to close a number of winning trades for some sweet profits.  We have prepared well for the pullback to the bottom of the trading range.  (read more…)