Wednesday Pre-Market Opinion -- Cisco, Symantec, TI, Oil & the Fed (CSCO, TXN, SYMC, USO)

Includes: CSCO, SYMC, TXN, USO
by: Philip Davis

See also: Wednesday Pre-Market: Key News & Data and Wednesday Morning View From Europe

All we need is a little bit of follow through today, and we'll have a new all-time high on the Dow. We got exactly the kind of late day action yesterday that I was looking for. The best is that we did it without tech and without a big performance from the oil stocks, which we need to leave behind if we are going to rotate out of that sector.

I'm not ready to throw in the towel on the SOX until it crosses $512, but another day like yesterday will do it. Texas Instruments (NYSE:TXN) is not wowing the analysts in day one of their pump fest, and Intel (NASDAQ:INTC) has got to close above $20 to be taken seriously.

After hours, Cisco Systems (NASDAQ:CSCO) indeed beat estimates (see the full conference call transcript), but options expensing hit the company hard. It will take the markets a day or two to figure out that Cisco is actually doing great. Projections for next quarter were in-line on revenue but they should beat estimates again as cost cutting starts to take hold. The stock is way underpriced and I will be hoping to pick up the Jul $22.50s options for .60 or less.

Symantec Corp. (NASDAQ:SYMC) was less ambiguous and very strong, although guidance was muted in the face of a looming threat from Microsoft (NASDAQ:MSFT) in the virus arena. Outside of merger items, profits were huge.

Oil (ETF: USO) took another run at $71 but couldn't close the deal, and it will all come down to the 10:30 inventory report where any build in crude will be a big disappointment to oil bulls. Crude oil chart here.

Gold (ETF: GLD) broke $700 and finished above it.

It all comes down to the Fed today. I'm expecting an identical report with identical language in the aftenoon, but the market is looking for any excuse to cut loose and I think a lack of bad news from the Fed will be just what it needs.