主题：03/02/2009 Market View -- 宁子

SUMMARY:

- It was Monday, so the market had to be down.

- Incomes are up . . . due to government pay raises.

- ISM posts second consecutive move upside, but a long way to go.

- Now investors watch if NASDAQ can hold and at least provide a bounce. A sharp downside open would help.

Another lower start to another week.

It didn't matter that the economic data was a bit better both before the open (personal spending and income) and a half hour into the session (ISM manufacturing). AIG was requiring more federal bailout money or else (and its tentacles stretch all over the world's financial markets). That soured the mood as investors wondered how much more funny money would require printing to get out of this. Once more a week started with fears stoked with the prospect of a global economic crash. I suppose they are worried about even more of a global economic crash than already exists. It could get worse, though you hate to dwell on that too much. LIBOR was still ticking higher on the key 3-month end and that hurts even though the overnight rate came back into line a bit at 0.31% after spiking to 0.36% Friday. The dollar surged again (1.2576 euros) as investors fear being in other currencies even with the US printing money 24/7. Bond yields tanked with the 10 year falling to 2.87% after closing Friday at 3.02%. Investors are not walking but running toward US Treasuries - - again. Oil tanked $4.72/bbl, down to 40.04. It is trying to climb and it is still holding some gains, but it was hammered Monday.

The problem confronting the world's economies is that the banking and financial issues are not resolved. Countries are trying to stimulate their economies as if their actions directed at the financial markets have succeeded in repairing the financial structures and institutions. They have not. No doubt there was improvement up to a month back, but that has stalled and started to backtrack before it got to the point where credit returned to relative free flow. You have to be able to access money. That has not been restored. Thus Europe is falling or has fallen off a cliff and is in, if you can imagine, worse shape than the US. Money flow and credit markets have to be restored for any recovery attempt to work. Only China has enough money in reserve not to need free flowing credit markets right now. Its economy is, from what we hear, perking up thanks to its stimulus efforts and its money reserves where it can guarantee funds. China is big, but it cannot carry the rest of the world with it.

TECHNICAL. Intraday action was plenty bearish with a down open, a modest bounce that came nowhere near positive, and then a rollover that closed at session lows and new lows for DJ30, SP500, and SP600.

INTERNALS. Depending upon your source on the session, the internals were bad or they were really bad. Actually, that is more limited to breadth and that shows extreme numbers (-11:1 NYSE or -22:1 by some reports; you find that when there are extreme beatings in the market that seemingly simply data to calculate varies widely; -7.6:1 NASDAQ). Extremes suggest turns but they are not necessarily time sensitive. They turn extreme and that is basically raising a flat go watch for other signals of a change. Hard to see any change in character in the market on this particular day. Volume was lower on both NASDAQ and NYSE though both remained above average, NYSE well above average. New lows were up but they are still below the November levels on both NYSE (800ish) and NASDAQ (500ish) even though SP500 and SP600 have crashed well below those November lows. Bigger picture that is a positive and something to keep in the picture, but as with breadth it is not a timing device.

CHARTS. NYSE indices were pretty much straight dives to the bottom of the pool as SP600 broke its November lows, joining SP500 and the downside leader DJ30 as they swim to lower and lower lows. NASDAQ made the quick drop to its November closing low and that is the key test for the market's immediate future. It is the last major index (although NASDAQ 100 and SOX are of interest and still well above their November lows) to test this level. Thus far the financials have been the albatross around the market's neck and it will be interesting of NASDAQ can fend off their downside magnetism and bounce. Thus far that is not the case as NASDAQ has followed the NYSE lower. After three sharp days lower, however, perhaps NASDAQ can spring a relief bounce or at least a bounce to set up another downside leg. With the blanket weakness it is hard to see any significant bounce here but that is often exactly when they show up.

LEADERSHIP. Even China was down on Monday. There was some strength in a few consumer retail stocks (e.g. TJX, AMZN) though strength is measured in not tanking below support versus making breakouts. Leadership is quite thin. There are holdouts, but out and out leaders are running as scared as a 10 point buck on opening day.