Into the final portion of today's session, let's remember that Cisco (CSCO) releases earnings after the close of trading, which could have an impact on overall market direction before as well as after the closing bell. Usually, Wall Street reacts significantly to CSCO's results and to its conference call.

What if anything does the enclosed daily chart tell us about the potential reaction to CSCO earnings? If we expect the company to beat the expectations, and if we expect the CEO to provide an upbeat assessment of the sector and the economy going forward, then a positive price reaction should propel CSCO to 23.80- 24.10 in a bullish, knee-jerk reaction to the news.

Whether or not the gains can or will be sustained is another issue, especially in an environment that has seen many a positive earnings result crushed by sell-the-news vigilantes. My overall pattern work warns me that the decline from the January 15 high at 25.10 to the January 28 low at 22.35 represents the first downleg of a larger correction that should press the stock into the 21.00-20.50 before completion. It is with that in mind, that I approach CSCO's result and any knee-jerk strength with considerable caution.

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.