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Round number resistance

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After a higher open, then dip lower, stocks are back near the unchanged level. Some early observations are that the Dow Industrials (INDU) 8,435 -0.09% are that the Dow encountered some resistance once again at the 8,500 level, while the S&P 500 Index (SPX.X) 898 +0.04% edged above the 900 level for a third time in six sessions, while the NASDAQ-100 Index (NDX.X) 989.92 -0.56% did trade just above the 1,000 mark this morning, the first time this index has been above the 1,000 level since closing below the 1,00 level back on August 27th.

In all, some of these "round number" levels on these major indexes may be providing some near-term resistance that are finding some sellers in today's session.

Sector gains are being led by the Fiber Optic Index (FOP.X) 35.69 +3.4% as telecom sectors continue to show improvement from their lows. Shares of Brocade Communications (NASDAQ:BRCD) $7.39 -10.5% trades against sector bullishness after guiding its Q4 numbers lower due to weakness in the IT spending environment. The company said its Q4 outlook now has EPS near $0.07 on revenues in the range of $152-$153 million, which is below consensus of $0.09 and $160.39 million.

Shares of networking bellwether Cisco Systems (NASDAQ:CSCO) $11.46 -2.71% turned lower on the Brocade guidance after trading a morning high of $12.11, which was a test of CSCO's still trending lower 50-day SMA. Morgan Stanley also downgraded the shares to "equal-weight" after the opening of trading.

Bullishness is found in the Gold/Silver Index (XAU.X) 64.28 +3.16% this morning, as the December Gold Futures (g02z) 315.10 +0.38% edges above 6-sessions of 315 resistance. This sector looks just the "opposite" of the major indexes as it trades just below its 50-day SMA. A move much above its 50-day of 318, combined with breaks below the 50-day SMA's in the major indexes could hint of a more defensive market.

For a third-straight session, Treasuries continue to see some buying, reversing some price lows set early Thursday morning. The benchmark December 10-year Treasury Futures (ty02z) 113'145 +0.27% has broken above its 50-day SMA, while shorter-dated maturities have the 5-year Treasury Futures (fv02z) 112'230 +0.28% making a break higher today after closing above their 50-day SMA on Friday at 112'125.

Market volume is just about average at the NASDAQ, which just now moves above the 1 billion share mark. NYSE volume is light at just over 800 million.

Despite a somewhat mixed trade in the major indexes, breadth remains positive at both the NYSE and NASDAQ. NYSE breadth is positive with advancers outnumbering decliners by a 17 to 13 margin, while NASDAQ breadth shows advancers outnumbering decliners by a narrow 8 to 7 margin.

New highs versus new lows is slightly negative, but healthy. 23 stocks are hitting new highs on the NYSE versus 32 stocks trading new lows. NASDAQ shows a more bullish tone with 46 stocks hitting new highs versus just 31 stocks at new lows. I can't remember the last time the NASDAQ showed more stocks hitting new highs versus the new lows category and hints that buyers are still rather aggressive in the 4-lettered stocks.

Shares of Gen-Probe (NASDAQ:GPRO) $19.71 +9.9% are one of the NASDAQ stocks surging to a new 52-week high after the biotech firm, which specializes in molecular diagnostics based on it patented nucleic acid testing technologies, announced that it will release its Q3 earnings on Tuesday, November 12, 2002 after the closing bell.

Jeff Bailey

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