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While not a NASDAQ-100 Component, IBM is key

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The major indexes have seen their best levels of the session come very close to Friday's morning high as further selling in Treasuries has appeared to generate enough cash to get stocks rebounding from some important levels of support that were tested again on Friday.

While better than expected bottom line earnings from Dow component Citigroup (C) $37.94 +1.57% help give the Dow Industrials (INDU) 8,306 +1.25% a 103-point lift and have had the Dow as high as 8,334 (right at the upper-end of our zone of resistance from 8,290-8,338.23), tonight's earnings from IBM (NYSE:IBM) $79.82 +1.35% will not only be closely watched and listened to as it relates to the Dow Industrials, but the technology-laden NASDAQ-100 Index (NDX.X) 1,044.81 +1.8%, which has traded my near-term bullish target from Friday afternoon's bullish profile in the NASDAQ-100 Index Tracking Stock (AMEX:QQQ) $26.00 +1.8% after a test of support again on Friday.

NASDAQ-100 Index (NDX) Chart - Daily Interval

While not an NDX component, IBM's recently completed quarterly earnings (consensus is for $0.80 per share) and any business trends found (good or bad) in the recent quarter will be key for the NASDAQ-100.

For risk averse bulls that took the bullish trade in the QQQ from Friday's market monitor at OptionInvestor.com, I've suggested that with today's further selling in Treasuries, that traders perhaps take some overnight risk, but raise an intra-day stop in their QQQ bullish trade from $25.52 to just under an intra-day level at $25.83. On a closing session basis, the bullish side of me would like to see an NDX close above the 1,046 level, which would be a close back above the WEEKLY pivot. In my mind, this would give a better chance of further bullishness into the 1,062- 1,072 area, which is my "max weekly gain" for a swing-trade type of gain.

Sector action is broadly positive today, but not overly so. NASDAQ-100 traders like to keep an eye on the Semiconductor Index (SOX.X) 303.50 +1.78%, and current levels of trade still find the SOX below its 200-day SMA of 305.70 for a 5th consecutive session, and this is still somewhat "defensive" for the NASDAQ- 100 at this point. However, the starting to round out 50-day SMA of 295 has served support through much of last week's trade and defines a tight range for the SOX. While IBM's earnings and comments will undoubtedly have some impact on the semiconductor sector, tonight's quarterly earnings report from Novellus (NASDAQ:NVLS) $27.10 +1.65% (consensus is for $0.07 per share) and Rambus (NASDAQ:RMBS) $15.61 +1.10% will have sector impact. Then tomorrow afternoon, sector bellwether Intel (NASDAQ:INTC) $17.06 +1.84% and Texas Instruments (NYSE:TXN) $16.68 +2.7% are scheduled to report earnings.

Jeff Bailey

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