I don’t think too many could have predicted the kind of results that Intel and Yahoo posted after the bell.  I know I was suprised.   At the very least I thought maybe they post average results.. but they were far from average.  Intel’s results were awful and Yahoo missed analyst estimates by a penny, but wasn’t even close to the whisper number of .19/share by posting .16/share.  IBM fared a bit better, but revenue numbers missed.  It was a good ‘ol fashioned after the bell tech wreck.  Obviously the market is going to get hit at the open tomorrow, but the important thing is how it closes.  The market will face some important tests of support in the coming days.  First levels of support in both the Nasdaq and S&P should provide us with clues as to the magnitude and duration of this pull back. Lets’ have a look…

The Nasdaq has led the way to start the year and there isn’t any reason for concern up through today’s action with orderly consolidation.  Today, the selling volume wasn’t particularly intense and much of the losses were erased by the end of the day.  It may be a different story tomorrow.  In the coming days, support levels around 2278-2280 could come into play, so it will be important to see how the Nasdaq responds at that level.  If it can’t hold that level, the likelihood of a drop to the 50 day moving average becomes more likely.   Let’s see how volume comes in tomorrow .. I have a feeling we’ll get the first day of institutional selling of the new year. 

It’s a similar scenario for the S&P as it nears the first level of support around 1275.  Bouncing from there would be considered a bullish move, but if it can’t hold chances are good it will test the 50 day moving average as well.  We shall see.

The area to watch now in the Dow is 10800 at the 50 day moving average.  However it could dip below and also test the previous area of consolidation around 10700.