主题：03/05/2009 Market View -- 宁子

SUMMARY:

- Wednesday one-day wonder as Thursday plows new low ground.

- China pulls a Geithner, makes a speech but no mention of a new stimulus plan.

- Same store sales bad, but for second month, not as bad as expected.

- Fear is ruling the market right now, but that is not enough yet.

- Looking for good bottoms can be fun, but not when looking for a market bottom.

Sellers slap down impudent buyers as NASDAQ undercuts the November closing low and looks at the intraday low.

The Wednesday move was lacking as pointed out last night, but there were possibilities such as showing a follow through and then having some leadership build bases to set up a further break higher. That pipe dream was stamped out quickly Thursday as the market gapped lower and sold off hard all day. Dreams shattered, hearts broken. Just another day in one of the greatest market implosions of all time.

The economic news was not that bad. Productivity hardly supported its name, falling 0.4% versus a 3.2% showing in January as unit labor costs shot 5.7% higher (1.8% in January). On the other hand jobless claims improved to 639K from 670K while continuing claims held basically steady at 5.106M. For the second consecutive month same store sales were down but not nearly as bad as expected. The ECB and BOE (European Central Bank, Bank of England) cut rates by 50BP to 1.5% and 0.5% respectively (sending the dollar surging to 1.2454 before closing at 1.2559).

That was not enough to overcome the downers, however. Wednesday China helped spark a rally when one of its ministers indicated a new and additional stimulus package would be announced today. When the time came and the person that was to announce the plan spoke he talked of how the current stimulus plan was working beautifully. Never mentioned a new plan or additions to the current one. Many quickly searched the backgrounds of both the Chinese spokesperson and our Treasury secretary Geithner to see if they were related. China pulled a Geithner, and all markets tumbled. Was China gaming us all to see (or show everyone) how much economic muscle it has now? Hint of a new stimulus plan, see what kind of excitement you can gin up, then act as if nothing of the sort was planned and see how they fall. A new form of financial torture: the Chinese stimulus torture.

On top of China's stimulus eggshell game, comments about GE's ability to survive as a viable entity rattled investors. GE has been in a death spiral since September, shaving off as much value in six months as it did in 13 months before this last dive. The three 'W's' are uttered every day by its shareholders: what would Welch do? Too late for that. GE is being treated as if it is liquidation value as well similar to some of the bank stocks. And how can we forget LIBOR. It ticked higher again.

Fear of a major, even beyond the current, economic meltdown is grinding solid companies into the dust. Fear accelerated rapidly since the start of the year and the crescendo since February is astonishing. Fear of what the Administration will do to our system of government and capitalism as it uses the crisis to gain the advantage. Fear that the Administration could not solve the problems even if it tried. Fear of massive unemployment. Fear of stocks going to zero. Fear of a real depression, something the author of a recent WSJ article now puts at greater than 30% versus the 25% cited in the original article (based on historical factors to generate the percentage). Lots of fear, but even that is not ginning up a bottom in the stock market at this point.

TECHNICAL. Intraday the action started lower with a gap and continued lower all session. A couple of bumps to the upside only provided targets for the sellers to shoot down. They did. The indices managed a very late bounce that took them off the session lows and likely prevented NASDAQ from fully testing its November low.

INTERNALS. Bad breadth though not as horrible as we have seen in the past. -5+:1 on NASDAQ and -8.6:1 on NYSE is not chopped liver; or maybe it is. Rather smelly. New lows started getting traction, but they basically matched the Monday levels as SP500, SP600 and DJ30 plowed new low ground. For now that remains a positive, but the market has to hold up at some point or the dam breaks again. Volume was mixed, higher on SP500 as the big names in finance and industry were hammered lower again. NASDAQ hit a new bear market closing low and volume was still high but it was not higher. Not clear distribution, but no doubt the high volume selling is far outstripping any high volume buying right now.

CHARTS. As noted, NASDAQ broke to a new bear market closing low, closing within three points of the intraday low. SP500, SP600, DJ30 plowed new low ground. SOX was positive part of the day and is holding over the February low. Resilience in the chips is a positive as the financials and big old companies are stripped of their mantles. NASDAQ 100 has dropped the December low but is still well over the November low. Looking for the large cap techs to test and maybe then there is a hold.

LEADERSHIP. Retail is trying to establish itself as some kind of leader. Stocks such as AMZN, TJX, FDO are showing strength but it is not across the board in their sectors. Something to watch, however. Some metals such as copper stocks are trying step it up, but other such as steel are not. Gold is coming back. Chips refuse to give up and may ultimately be the market's salvation when this selling ends. Right now, however, there is no cohesive leadership and if you are looking for an entire sector to move higher you are going to have to wait. Of course the financials have to get back in action at some point and they are not without the credit issues getting fixed.