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Stocks par losses as session progresses

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The Dow Industrials has recapture about 100 points of an earlier 150 decline to trade down 45 points at 10,456 as technology components Hewlett Packard (NYSE:HWP) $18.55 +2%, Intel (NASDAQ:INTC) $31.37 +2.8% and Microsoft (NASDAQ:MSFT) $61.20 +1.87% help offset losses from General Electric (NYSE:GE) $37.40 -3.6%.

General Electric's (GE) recent declines are widely attributed to yesterday's less than bullish comments by PIMCO's bond fund manager Bill Gross, in regards to GE Capital's outstanding commercial paper debt, which Mr. Gross felt was high at three- times the size of their bank credit lines.

The NASDAQ Composite (COMPX) is putting on a good show today with a 1.29% gain, with biotech Protein Design Labs (NASDAQ:PDLI) $18.15 +20.82% trading higher after a plethora of market calls that were both bullish and bearish from major institutions. NASDAQ bulls are facing fomidable resistance in the 1,868-1,890 level as depicted by retracement and trending lower 50-day and 200-day moving averages.

NASDAQ Composite Chart - Daily Interval

The NASDAQ Composite (COMPX) is trying to bounce back after yesterday's declines, but resistance should be formidable at the 1,890 level. We're seeing some stocks like Brocade Communications (NASDAQ:BRCD) $25.40 +10% bounce back strong. In yesterday's market monitor, we mentioned that bears needed to be careful in that stock as the point and figure chart showed the stock had recently achieved a bearish vertical count and may be subject to a short-covering rally. That's what appears to be driving the bullishness today and there's some upside room to $29 before retracement resistance would come into play. Not unlike the NASDAQ Composite, Brocade's (BRCD) bar chart shows a rolling lower 200-day and 50-day MA up at $31.

Jeff Bailey
Senior Market Technician
Option Investor

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