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Jeff has earned a well-deserved vacation. Everyone at OIN wishes him a relaxing time for the next week, and we promise to do our best substituting for him. I'll be doing the early-morning updates as well as some of the evening index wraps. I'll include overnight developments in the Asian and European markets in these first intraday updates. In addition to the gains made in our markets over the last weeks, Asian and European markets have been clawing their way up from recent lows, too. Along the way, they've been printing new P&F buy signals. Dangers signs still exist, however, with Germany, the world's third-largest economy, widely rumored to be teetering on the edge of another recession, and Japan, the world's second-largest economy, forced to consider emergency economic plans to rescue the stock market. These markets bear watching as they impact our own.

The Nikkei opened up 63.80 points last night, to 8147.36, above Tuesday's high and above the 8110-8125 resistance that turned back its advance on Tuesday. As has been reported for nearly a week, Japan's three ruling coalition parties have been hammering out an emergency economic proposal to stop the dumping of stock shares by pension plans and financial institutions, made necessary by government regulations in some cases. Those three parties apparently came to an agreement that will be presented on Thursday. The optimism soon gave way to volatility, however, with the Nikkei diving twenty points into negative territory before recovering to post a day's gain of 26.21 points or .32%, closing at 8109.77. Never making it back to the opening highs, the Nikkei closed just below that 8110-8125 resistance.

Germany took a step closer to recession today, with unemployment numbers again rising, to 10.7% or 8.9% when adjusted for EU standards. Just as the Japanese government hammers out an emergency economic plan, Germany's Chancellor Gerhard Schroeder attempts to enact measures that will ease unemployment and avert another recession. Those plans will include cuts in jobless benefits and reduced protections from dismissals in hopes that smaller companies will increase hiring, but the measures face fierce opposition. As of 8:15 ET, the DAX traded down 22.08 points or 0.72%, to 3044.87, down from the day's high of 3068.08. The FTSE 100 traded up 16.40 points or 0.41%, to 4022.80, down from the day's high of 4038.50. The CAC 40 traded down 0.97 points or 0.03%, to 3056.59, down from the day's high of 3070.62.

Also as of 8:15 ET, U.S. futures traded mostly flat, with S&P futures down 0.90, DJ futures up 10.00, and Nasdaq futures down 0.50. The dollar was up 0.03, to 95.37, and gold was also up, 1.10 in this case. Ten-year and thirty-year bond trade up. CSCO last traded at 15.82, trying to recover yesterday's closing 15.90 value as it moves up from the 15.59 low it dove to during afterhours trading. As was reported in last night's newsletter, the company posted a higher profit but forecast flat sales. In the conference call, CEO Chambers added that the book-to-bill ratio for the company was less than 1. Although Merrill Lynch commented this morning on the company's lack of growth and recommended that investors stay on the side, Banc of American Securities raised its price target for Cisco from 17 to 20, perhaps leading to this morning's recovery. Since late last year, I've marked a slightly ascending neckline for a reverse or inverse H&S on CSCO's daily chart, with that neckline turning back the right-shoulder advances in mid-January. CSCO now appears to have formed a second right shoulder, as sometimes happens, with the neckline now crossing at about 16. Today should be a key day for CSCO and perhaps for tech stocks in general. Traders should keep in mind Jeff's admonitions about the growing risks to bullish traders in tech stocks as the bullish percents grow toward overbought levels on the Nasdaq.

Today's economic numbers include March wholesale inventories to be released at 10 ET. The forecast is for an increase of 0.1%, with a previous increase of 0.3%. March consumer credit will also be released today, at 3 ET. I've read two widely different forecasts, one for 4.08 billion and another for $3.1 billion, with a previous number of $1.5 billion.

Fair value for the S&P 500 today is $-.44. That price will not change during the session. HL Camp & Company set their computers for program buying at $0.40 and for program selling at $-1.94.

Linda Piazza

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