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Equity futures look soft

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Equity futures are looking weak this morning with the S&P 500 futures down 7. NASDAQ futures are lower by 17 and Dow futures are off 65. We are also seeing some strength from the bond market as YIELDS on the 5-year (FVX.X), 10-year (TNX.X) and 30- year (TYX.X) are all lower (buying in bonds). Fair value on the S&P 500 for today is $7.37. Computer buy programs are set for buying at $9.19 and set for selling at $5.55

Cisco's warning, big reason tech looks weak

Cisco Systems (NASDAQ:CSCO) spooked Wall Street with its second earnings warning in two months, saying that revenue will decline 30% this quarter as the U.S. economic slowdown spreads around the world. Currently we're seeing CSCO trade in the pre-market at $15.96, which is down from Monday's close of $17.19.

Cisco Systems Chart - 60-minute interval

Shares of CSCO remain in a nasty downtrend and bullish traders willing to give this stock some time and an opportunity to do some base building before establishing a position would be wise. The last two sessions, it looks like the market was using rallies to the 200-period MA as a point to sell the stock. This morning's pre-market activity now has the stock trading very near the 50-period MA. From the perspective of a market maker, I'd think that resistance should be forming near the $16.88 level over the next couple of days.

Jeff Bailey
Senior Market Technician
www.PremierMarkets.com

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