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Last night's well-received Intel and Microsoft earnings seemed to set the stage for solid NASDAQ rally. But following the expected gap higher this morning, the index has reverted to more sedate trading only a few points above breakeven.

15-minute chart - NASDAQ:

Daily chart - NASDAQ:

A large chunk of the NASDAQ's small gains can be attributed to a 2.9% rally in the SOX.X, which is far-and-away the strongest performing sector index this afternoon. INTC is leading the way with a gain of 5.8%. Shares of Texas Instruments (TXN) are faring even better in the aftermath of their earnings report; charging ahead by 9.6% in a positive reaction to the company's solid quarter. Continued strength in the chip group will be crucial if the Composite is ever going to crack that 1425 resistance level.

Daily chart - SOX.X:

The mood is decidedly more bearish outside of the tech realm. The Dow is trading near the session lows and has fallen below its 200-dma after rolling over this morning near the multi-month trend of lower highs. Leading the way lower are strong pullbacks in KO, MM, SBC, and JNJ. Honeywell (HON) is the only non-tech Dow component currently showing a gain.

Market internals reveal some degree of indecision, with advancers and decliners nearly even on both the NYSE and NASDAQ. Bulls will be pleased to see 52-week highs easily topping 52-week lows on both exchanges. Volume is relatively brisk on the Big Board (1.4 bln shares) and is shaping up to be the highest reading of the week.

Kent Barton

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