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SAN FRANCISCO -- For all the hand-wringing over

Cisco Systems


, today really wasn't


bad. Yes, Cisco fell 13.1% and dragged down high-tech names such as






, but major market averages posted relatively tame losses and each closed above session lows.


Dow Jones Industrial Average

shed 0.1% to 10,946.72 after trading as low as 10,911.26; the

S&P 500

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lost 0.8% to 1340.89 after trading as low as 1334.22, while the

Nasdaq Composite

declined 2.1% to 2607.82 vs. a nadir of 2554.76.

Bulls were encouraged by gains from tech giants






, as well as the

Russell 2000's

modest rise. Also from the glass-is-half-full perspective, advancers bested declining stocks 8 to 7 in

Big Board

trading. Also, new 52-week highs topped new lows 167 to 17 and by 77 to 37 in over-the-counter trading, although losers led there 11 to 7.

The glass-is-half-empty crowd focused, of course, on Cisco and the fact major averages did fall, with the Dow again unable to sustain a move above 11,000.

All in all, it seems like today could have been worse. I know some of you are shocked (


) to read anything even remotely positive in this column. But I'm still working on the theory expressed here

Jan. 17: The Comp has "settled" into a new trading range of between 2500 and 3000, and that it's not necessary for long-term investors to get overly alarmed or excited unless the index breaks decidedly out of that range.

For traders, the implication is that it's better to sell as the index heads toward the top of that range, and a buy as it heads toward the bottom, which is precisely where it's going, according to Don Hays of

Hays Advisory Group


On Monday, Hays wrote that if the index continues to follow the pattern of Japan's post-bubble


of 1990 -- which he claims continues to be the case -- the Comp should "tread water for a couple of more days, and then start a more serious decline that will bring it back around 2500 in the next four to five weeks."

Hays, whose recent short- and intermediate-term market calls have been among the keenest, continues to profess the market is currently enjoying an

interlude rally prior to the beginning of the dreaded "third phase" of the bear market, which will begin some time in the second quarter.

Despite expectations for near-term pain in the Comp, the strategist today recommended long-term investors stick to the buy call he made in

late December. He cited ongoing strength in the


advance/decline and the

Value Line Arithmetic Index

, which fell a relatively sparse 0.1% today and is up 17.6% since bottoming on Dec. 20.

However, "I don't expect the typical stock to continue to resist the bearish forces when/if they come back," Hays said.

If Hays is right, and I think he should be given the benefit of the doubt until proven wrong, the half-full side of this story is that the broader market should continue to rally and that the Comp will rebound even if it's in for a bit of tough sledding near term. The half-empty side, of course, is that the second half of 2001 isn't going to be as rosy as most pundits currently predict.

On Their Minds

Cisco's decline -- and the

astonishment that analysts could not have seen its weak quarter coming -- was clearly the No. 1 subject of conversation among traders today.

But decimalization was a not-so-distant second. Clearly, the debate over whether decimalization is really generating the benefits promised won't be settled for months, if not years. But the early returns from a handful of market participants are far from positive.

To see the rest of this article, click here:

Aaron L. Task writes daily for In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to

Aaron L. Task.