(By Rich Bieglmeier) Big Blue may have singlehandedly ended the current rebound. IBM never, ever misses, until coming up short on revenue yesterday. The tech giant's results will weigh heavily on the Dow and tech stocks, which could drag the NASDAQ lower, too.
The NASDAQ is in a trading channel and pressing against the upper channel. However, even if the index passes one line of resistance, there is another cap just a few points higher. iStock feels it will be difficult for the NASDAQ to get on top of 3,075 to 3,100.
On the plus side, Momentum has clearly picked up for the equity markets in a positive way, but the three levels we monitor are against a wall of resistance, too. In all likelihood, it's going to take some good news to offset IBM's slip up to push stocks through mo's ceiling.
Unfortunately, there isn't any big news on the economic front until Thursday's Jobless Claims, which everybody will be watching to see how California's omission impacts this week's results. We'll have more on it in tomorrow's stock market opening report.
Today, we will see housing starts before the market opens. Wall Street anticipates a pace of 765,000 units. Since November of 2011, the number has been consistently between 700,000 and 750,000. An on target announcement doesn't really change anything, and we don't see it as a big market mover today – maybe a temporary bump or blip, but nothing with any staying power.
The BIG names on the earnings calendar today, include American Express Co. (AXP), Bank of America Corp. (BAC), and eBay Inc (EBAY). It's been a good quarter for financials, so far, and we expect to see more of the same from AXP and BAC, notwithstanding sudden resignations.
EBAY may prove to be a little trickier; although, retail and online sales did fairly well in the third quarter. The e-auctioneer has a tremendous record of beating or meeting consensus estimates. In the last four years, EBAY has topped estimates in 12 of the last 16 quarters and hit the mark on the other four occasions. Interestingly, the company has produced some of its biggest surprises in this quarter.
iStock will return tomorrow with our take on the state of third quarter earning so far. With IBM likely to take some air out of stocks today, we are going to refrain from submitting any trading ideas today.