主题：02/25/2009 Market View -- 宁子

SUMMARY:

- Fooled once, fooled twice and yet a third time. Market again jilted on bank bailout plans.

- Existing home sales continue their decline faster than expected.

- Gasoline prices set to jump back up as inventories fall.

- Market still trying to get some traction for a continued bounce off support.

Another bailout announcement, another surprising lack of substance.

The session started weaker on the heels of the Tuesday bounce. Not bad to start a bit softer but that requires a market with some strength. That is a wide open question right now with all of one day of a rally off the SP500 November low.

There was some help. The EU announced a coordinated bank plan. The UK said it will have a firm plan in place by Friday. Sounds hauntingly familiar. After the Obama speech many brokers and traders we talked to were glum at the prospect of more spending, taxes, national healthcare. Some people take offense at mentioning this, but it is a fact that many floor traders and brokers are worried about what is to come and they play a big role in the market activity on any given day. Bernanke was speaking again but it was a rehash of Tuesday. There were plenty of news items, but nothing positive enough to energize stocks out of the gate.

A choppy session that wasn't helped by NT announced 3200 layoffs in addition to the 1500 previously announced. After making a higher low near lunch, however, the market rallied into the last hour. The word of another bank bailout press conference helped rally gin up the move. In the last half hour it lost its nerve, likely guessing that little substance would emerge yet again. Its guess was correct. Nineteen banks would undergo a stress test then have six months to flush up the reserves if needed. You wanted specifics, you didn't get them.

The market was positive but then sold off ahead of the close leaving only SOX positive. The market is desperately searching for some clarity with these bank issues, but it is not getting it. What it is getting is an idea that there is not a clue of what to do about the problem and that is why it is taking so long. It would be far better to avoid having these press conferences and announcements where there is nothing to discuss or announce. The people and even the markets want to believe that the government is up to the fix, but nearly everyone we talk with has serious doubts even with the lofty rhetoric of late. No one wants the mistakes of the TARP with its cram down similar to the spending bill cram down, but there has been enough time for a real plan to emerge. Heck during the hiatus several decent ones have been trotted if you accept spending hundreds of billions more. As that appears to be the case then there has been plenty of time to take the best elements of some good plans from very smart people and meld them into a real plan that we can all get behind.

While we wait, however, the credit markets remain frozen (LIBOR 3-month ticked up again to 1.26%) and every day that occurs more economic damage is done. Confidence is down to 25 as consumers bottle it up across the land. Even worse, businesses are falling left and right, unable to get credit at reasonable rates. Congress is going to be shocked, or not, when it goes to raise taxes and finds there is not much to tax.

TECHNICAL. Intraday the action started soft and strengthened. There was no straight rally higher as the action was quite choppy, but a series of higher lows propelled the indices to positive and session highs in the last hour. Then the bearish action appeared and took the indices negative with a sharp late selloff. The bulls are still too few and too nervous.

INTERNALS. Volume was still solid even if it was mixed with NASDAQ edging higher and NYSE slipping modestly lower. Breadth definitely slipped, and even with the late selling NASDAQ breadth was quite negative (-2.6:1). The action was a little more corrosive than the action suggest.

CHARTS. There was no real movement. After jumping off the November low Tuesday SP500 lost some ground and NASDAQ to hold its December low. Tuesday was an inside day on NASDAQ, and the Wednesday doji did little to clear up the picture. Same with SP500; it held its move off the November low but made no significant headway. Same with the small caps. Unable to put together a strong move here, but there is high volume as the indices hold over support. That can suggest some accumulation as buyers step in and keep stocks from falling below those key levels. And once again, the indices are holding over in their consolidations. Some positives but the indices still have to show a follow through starting Friday or early next week. In the interim they have to hold on and let some leaders come back such as the chips.

LEADERSHIP. The chips posted gains on higher volume Wednesday. Perhaps they ARE trying to make a comeback. They still need work. China still looks good. Even some retail look solid. Techs bounced, but as with chips, they need more work to recover. There are stocks here and there breaking higher, but after the 2 weeks of selling a lot of the leadership and budding leadership was fractured. Sure there are stocks that are set up to move higher, but they are scattered across many sectors without the kind of breadth and depth seen before the selling. It takes work to get back after that kind of selling.