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Earnings warnings from several technology companies have the markets in for a lower opening this morning.

Internet Security Systems (NASD:ISSX) warned that it now expects a loss of 2 cents a share versus an earlier expected profit of 15 cents. The stock is getting hammered, down 35%. Software companies Rational and Epiphany also warned, which could make for a rough day for software stocks.

Broadvision (NASD:BVSN) also warned that its loss would be wider than expected, 17 to 20 cents a share compared to 11 cents, and is trading down $1.

Even old economy stock DuPont cautioned investors that its profits would come up short of the 53 cents a share it had foretold.

The markets are talking the news relatively well, with the Dow down 37 and the Nasdaq lower by 13.50.

Two stocks short of bull confirmed

Yesterday I felt we were getting close to a couple of key resistance levels that I felt the markets needed to hurdle in order to really get things going, but by sessions end stocks had started to fade. This morning's bullish percent reading on the NASDAQ-100 shows us that we're a net gain of two stocks away from getting the bullish percent indicator back into bull confirmed status. The current status remains "bull alert" for the NASDAQ- 100 and traders should continue to trade cautious (both bulls and bears) at current levels.

NASDAQ-100 Bullish Percent - 2% box

Yesterday we looked at several index charts and pointed out how they were having trouble getting above certain levels of retracement that we felt needed to be broken to the upside. Many think of an index chart as the "outward" appearance, but subscribers know all to well that and index chart of the NASDAQ- 100 (NDX.X) can be driven by just one or two stocks acting well. Subscribers then know that the bullish percent indicator gives us a look at the internals of the index and helps measure true health of the index. As you can see, while the NASDAQ-100 has been having trouble getting above the 1,865 level and its 50-day moving average, the bullish percent is also hovering at a key level of "internal resistance." Traders should continue to trade cautiously and begin to think that a close above the 1,865 level might have the bullish percent also giving a bull confirmed reading. That type of action might be the beginning of a nice rally for this index.

Jeff Bailey
Senior Market Technician
www.premierinvestor.net

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