Bears started Thursday determined to finally put bulls back on their heels following earnings reports from the previous session from Cisco Systems (CSCO) and Palo Alto Networks (PANW), states Jon Markman, editor of Strategic Advantage.

Bears ran into furious counterpunching from bulls. The Nasdaq 100 closed at 15,833, a gain of 0.1%. Bears are in trouble. 

I wrote Wednesday that bears needed to make a big deal of the Cisco and Palo Alto results. They needed to argue that the lousy forecast from Cisco means that large tech companies are cutting back on capital expenditure programs and that the Palo Alto results show investors are too optimistic about future growth in enterprise spending. 

Bears fell flat on their faces. Although Cisco and Palo Alto declined 9.8%, and 5.4% respectively, the rest of big tech found rock-solid bids into the early decline. Arista Networks (ANET), a competitor to Cisco in high-end networking gear, recouped nearly all of the early losses to close down only 0.2%. 

And Microsoft (MSFT), the biggest of the enterprise software franchises, finished at a fresh record high. This is professional money managers buying the dips. Look for this behavior to spread to small capitalization issues for the remainder of this year. 

Pros need to catch up with the benchmark. Small caps move fast. Pros will rationalize this transition by talking about the advantages of smaller companies as the domestic economy finds lower interest rates. This switch out of big stocks should give the mega caps an opportunity to digest the gains from the October lows. 

The best place to buy the NDX is back at 15,216, the rising 20-day moving average. That is now key support. There is resistance at 15,932, then the record high at 16,417. 

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