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Dow cooks up biggest gain in a month

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Bulls sat down at the table and gobbled up stocks as a strong round of quarterly earnings helped push aside fears of higher interest rates, while Treasury Secretary Snow's echoing of Fed Chairman Alan Greenspan's comments regarding "lack of inflation" brought some buyers back into Treasuries, and lifting stock investor's confidence.

Ed Peters, chief investment officer at Pan Agora, said that while the investors continue to worry about whether the Federal Reserve will raise rates within the next few months, he doesn't anticipate "any sort of change in policy by the Fed until after the election and probably not even until early next year."

U.S. Market Watch - 04/22/04 Close

Only the Disk Drive Index (DDX.X) 118.31 -0.79%, where Maxtor (NYSE:MXO) $6.69 -11.97% warned that second-quarter results would fall shy of Wall Street's estimates.

The Dow Industrials (INDU) were bolstered by gains for Caterpillar (NYSE:CAT) $84.10 +3.72%, and Boeing (NYSE:BA) $42.27 +3.47%, which overwhelmed weakness in Coca-Cola (NYSE:KO) $51.46 -1.28%, while the technology sector got a boost from earnings- related strength for eBay (NASDAQ:EBAY) $82.59 +10.44% and Qualcomm (NASDAQ:QCOM) $67.88 +3.09%.

In after-hours trade, Microsoft (NASDAQ:MSFT) $25.95 +1.96%, which gained $0.50 on the session, jumped 4.8% to $27.20 after reporting quarterly earnings of $0.34, which was $0.06 above consensus estimates.

Biotechnology component Gilead Sciences (NASDAQ:GILD) $59.22 +2.38% surged more than $4.00 in extended hours after reporting quarterly earnings of $0.43, which was 9-cents better than Wall Street's forecast.

Market Snapshot / Internals - 04:00 PM EST

The session started out flat, with gainers and advancers even at the 10:00 AM market, but just around 11:00 AM EDT, all heck broke lose.

Pivot Analysis Matrix -

Dow Jones Transportation Average (TRAN) - Daily Interval

They're back! The transports, which were muffled in early February have suddenly come roaring back, gaining a bold 52 points and breaking above downward trend. Today's break looks very bullish with support building above 2,900.

With the Transports breaking above their downward trend, this would suggest leadership from the Transports, where traders and investors may be well served to keep an eye on THIS GROUP tomorrow at the 3,000 level. A "failure" type move and sharp reversal back lower, or a surge on higher could be the difference between a strong follow through for the major indices, or a trip back lower and giveback of gains.

S&P 500 Index Chart - Daily Intervals

The SPX hovered below its MONTHLY Pivot until 10:40 AM EDT, but from there, the pressure cooker exploded to the upside. I went back through various newswire feeds and could only find "negative" headlines (U.S. warning Asia to be on guard against terror attacks in sea lanes, report of a missing radioactive fuel rod from a Vermont nuclear plant). I had set an upside alert on the QQQ just above the morning high of $36.23 and posted an alert in the Market Monitor at 10:39:24. Just prior, Motorola (NYSE:MOT) $19.62 +7.35% had moved above yesterday's high of $16.20.

I could not find the exact time of John Snow's speech to The Bond Market Association, but he was scheduled to give his speech over lunch. Today's trade suggests somebody got hold of his prepared remarks prior to his speech.

If you would like to read the Honorable John W. Snow's prepared remarks, you can do so by clicking this link.

Dow Industrials (INDU) Chart - Daily Intervals

While CAT did have a strong earnings report, an intra-day chart would show the INDU also tentative below its WEEKLY S1 of 10,332, but when it moved above its MONTHLY Pivot of 10,353 at 11:05, it was like somebody fired up the CAT diesel and the INDU quickly added 100-points just about an hour.

3M (NYSE:MMM) $86.95 +3.61% closed at an all-time high. In a positive breadth session of 25:5, Coca-Cola (KO) $51.46 -1.28% was the only stock to fall more than 1% by the close, but finished well off its session low of $50.70, where its rising 21- day SMA served support.

NASDAQ-100 Tracker (AMEX:QQQ) - Daily Intervals

I'm not kidding you. I'm trying keep traders updated on our Taser (NASDAQ:TASR) $77.15 -7.88% put play, trying to get filled on a bullish trade in Southwest Airlines (NYSE:LUV) $15.18 +3.05%, type a Market Monitor Alert for the QQQ as it "edged" to a then session high of $36.24. By the time I get the 11:00 Intra-day update written, uploaded and e-mailed, I look at my QCharts trade station and think I'm getting all kinds of bad ticks as the QQQ has blown through its WEEKLY Pivot and overlapping MONTHLY 38.2% like a hot knife through butter.

Support begins to look firm at $35.68, and if not for the high levels of bullish %, I'd have to start pounding my fist on the table and say "buy the Q's to the highs."

While after-hours trade is not a true market response, Microsoft (NASDAQ:MSFT) gains favor, the QQQ could trade very strong.

In after-hours trade, the Q's last tick was $37.17.

I should note that PeopleSoft (NASDAQ:PSFT) $18.89 +4.01%, gave back all of today's gains in extended hours after reporting quarterly earnings and forward guidance.

Jeff Bailey

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