CSCO..the straw that broke the camels back?

..or is it really the last straw that broke the ' donkeys' back?.  Cause that's what this market is!...A wobbly donkey!.    We'll know soon enough, but this report/ outlook was not one that was expected and wanted.   This was not the 'water' the donkey/camel was in much dire need of yesterday after being pummeled by more of the subprime storm during the day.  This time from Morgan Stanley/AIG.. Of course, the USD played a big part too as did the talk of the Chinese putting their foreign exchange reserve into euros.  Hell, you got Brazilian models asking to be paid in Euros now.lol..who's..what's next in regards to the USD fallout.  Some intervention is needed here.  After loading up the markets back with all these subprime issues since summer, we've been able to still move thanks to the big techs earnings reports...RIMM, GOOG, AAPL, MSFT.  Now what might be a inconsequential seemingly in the grand scope of things, CSCO not giving a glowing outlook might cloud us even more.   There is a limit to everyone's endurance and everyone has a breaking point.  After literally trying to carry the market on its back, you have to wonder if the techs have had enough now.    Exhaustion might be here.    A breaking point might be reached, it is damn close with us.   What we said in the weekend chart note is we don't want a close under 1500SPX/ 13500 DJIA, well we got that as the market broke down these levels hard.  We are in a very cautious stance as seemingly nothing now can stimulate the market.   We will get the customary bounce very soon, but we'd look for that as an opportunity for the investor/ trader to sell some into and catch their breath.   Be selective if buying and go in smaller sizes.  Look for pockets of strength (eg. solars still?) and earning reports should still provide opportunities in individual stocks...eg...MA, we'd just not fall in love with too many of them and take profits sooner. 

When the subprime winds started to blow this summer, we suggested a potential switch into more Chinese and Russian (of the BRIC) stocks as this might be looked as a possible way out of what we were seeing and getting in US stocks.  This worked!.  The same concept might develop now if the techs can no longer carry the market and traders money looks elsewhere to park.  Considering all the new Chinese issues have been taken apart since the crazy run recently,  we'd not be surprised if the hedgies turn their attention on this group soon again to make some money off momentum.   Maybe it's just wishful thinking on our part, but if these guys are not meeting their goals again , they might as before and run these from the lows this time around.  It would be easy.  In the meantime, we still have the solars booming and today many names familar to DJIM, SPWR JASO etc.should benefit from darling.. FSLR report yesterday. 

earnings of $0.49 per share, excluding non-recurring items, .29c better than the Reuters Estimates consensus of $0.20; revenues rose 289.7% year/year to $159 mln vs the $120.7 mln consensus .See $480-485 mln, consensus is $412 mln, expect total production output of 200MW; planned start up costs are at the lower end of previous guidance range of $18-20 mln; 24-25% operating margin; taxrate for Q4 is 29-30%; CapEx for 2007 is $280 mln... Epcect $760-800 mln in revs in 2008, consensus is $699 mln; 1H08 revs will decline sequentially over Q4 in 2007 due to contractual price decline and foreign exchange rates;

YTEC also reported and looks good sequentially most importantly....beats by $0.06; gives outlook Reports Q3 (Sept) earnings of $0.18 per share, ex-items, 0.06 better than the Reuters Estimates consensus of $0.12. Revenues rose 44.0% sequentially, net income up 39% seq. and 51% YOY.   Co gives outlook saying, "We see Chinese banks continue to invest in IT infrastructure in order to further improve their operational efficiency and profitability, especially in our core service areas such as electronic customer service channels like web- banking and call centers, and risk management/performance solutions. We also see that small to medium sized banks are becoming more aggressive in IT investment as they prepare for public listing and increase their competitiveness in the industry. Since the acquisition of Easycon that was completed last quarter, we see great opportunity to penetrating this niche market, and we will expect greater contribution to our revenue and profit from the small and medium sized banks.