主题：03/03/2009 Market View -- 宁子

SUMMARY:

- Don't get the washout and thus a quiet session, but NASDAQ holds the lows again.

- Where did the pending home sales go?

- After hours warnings take futures lower, hold out possibility for that morning washout that leads to a rally.

Geithner speaks and the market doesn't crash. Doesn't do much of anything.

Maybe it was a moral victory that Geithner talked to Congress about the proposed budget that raises taxes on the jobs creators, and he didn't look like a rookie as in his prior appearances. He didn't offer anything new substantively, but he didn't sc**w the pooch either (just watched 'The Right Stuff' the other day).

It didn't hurt that Bernanke softened up the crowd with announcements about the TALF (the consumer loan, small business loan aid plan) and that TALF purchases were starting (finally). Recall that was the one facility that actually worked to calm LIBOR. When Paulson decided to change horses and use TARP money for direct giveaways to banks, LIBOR revolted. Bernanke came out the TALF and LIBOR slid lower as easily as a veteran skier on a bunny slope. LIBOR is now bucking again, however, given the stimulus package, the lack of a defined bank plan, and general hostility toward the financial markets and business. Today it was the low end's turn to tick higher with the overnight up to 0.32%, the 1-month up to 0.51% while the 3-month held steady, though elevated again, at 1.27%.

Futures were up despite the Monday dive lower. No washout as we had wanted. AAPL announced some new mini computers and edged higher. XLNX reported guidance that was crappy but not as crappy as originally thought. It rose from the Monday selling. Yes, that is how bad things are. It is like you rewarding your kid who comes home with a 55 on a key test and says he expected a 40. The kid should get a commendation, after a whipping, for creative thinking.

It was enough, however, to get futures up and start the market higher. Then it was up and down and down and up all session that got the market nowhere by the close.

TECHNICAL. Choppy was the word for the session as the indices churned in a narrow range. A good rally in the afternoon session pushed NASDAQ to a new session high, but then the old habits took over and NASDAQ along with the other indices gave it back. A day of constant back and forth between bulls and bears, but note that there was no sustained surge by NASDAQ off the test of the November low.

INTERNALS. Quite benign breadth for a change after massively negative levels Monday. New lows contracted a bit and again we note they never did top or really come close to the November levels even on Monday when the NYSE indices were divining new lows and NASDAQ tested its old low. Volume was a different story. It was mixed, i.e. up on NASDAQ and lower on NYSE, but once again levels were very high on both. So we have the big indices down on rising trade. Without further analysis you say another distribution day on top of Monday. But, NASDAQ held its low again and the range was relatively narrow. Holding that low in a narrow range is a sign of positive churn, i.e. where the buyers are stepping in as fast as sellers are selling. That actually suggests there is accumulation taking place.

CHARTS. The key was NASDAQ as it is the only major index covered on the financial stations that is holding its November low. It held it again. The NYSE indices lost modest ground while SOX and NASDAQ 100 posted modest gains. Right before the last selling to end the session, the indices were showing candlestick chart doji, an indication of a potential momentum change. By the close given that late selloff, however, they were not as prominent on NASDAQ. The NYSE composite, DJ30, and to a lesser extent SP500, showed some loose doji. NASDAQ holding its lows, NYSE showing some doji action, high volume churn at support, five consecutive sessions to the downside on SP500. If the market opens strongly lower Wednesday, the market is primed for a washout reversal and rally back up toward resistance.

LEADERSHIP. Looking for some. China continues to look promising, but it is having issues with some of its stocks. Chips are good and bad. Some metals are okay, most are crappy, at beast looking for an oversold bounce. Seems most every sector has the good in it as well as the bad. No clear cut leadership sectors as in January (chips, metals, agriculture). What that tells us is that if there is a bounce it is likely just a relief bounce inside an overall downtrend. Now any rally attempt can lead to leadership setting up new bases for a more sustained move higher, but this market leadership has some work to do before it gets to that point.