主题：03/14/2009 Market View -- 宁子

SUMMARY:

- Market does what it has to, hangs onto gains heading into the weekend.

- China worried about its US Treasury holdings, announces more stimulus to come.

- LIBOR ticks lower for the first time in weeks.

- Michigan sentiment shows its own signs of thaw.

- Pattern of the week: the explosive Ascending triangle

- Starting the week looking for a follow through while the indices are extended.

Sellers leave early for Spring Break as market holds its gains to the close.

The bulls cannot complain about the action as SP500 and NASDAQ held their gains right up to the Friday bell. Both are bumping at next resistance, but instead of turning right back down in a dive as they would have done, oh say, anytime over the past seven months, they held the gains, all of them, into the weekend. They were not huge absolute numbers with NASDAQ scoring 5 points, DJ30 54 points and SP500 6 points, but then again they were huge in that 162 points on NASDAQ and 678 points on DJ30 for the week did not draw the fire of short sellers. It is just a week of gains off the lows, but this is a notable character change heading into a new week, and in this market we know what can happen: anything.

Friday had its bad news and good news, or good news and bad news depending upon whether you are long or short the market. The Bad: Berkshire Hathaway credit downgraded to AA+. China says it wants guarantees from the US that the couple of trillion dollars in US Treasuries it holds will remain solid. Imports were down again as consumers continue to lay off the imports, something history shows we do in recessions. No surprise there, especially compared to China seeking guarantees. As Hawkeye said to Hot Lips Houlihan in the television's 'MASH' when she asked what kind of guarantees the nurses could get with respect to potential repeated violations, 'what kind of guarantee do you want?'

The Good: China wanted a guarantee on one hand and on the other its premier offered it would adopt additional stimulus. Earlier he pulled a Geithner and did not follow through with the much heralded announcement of more stimulus to come. He does it Friday after slapping some at the US. Don't think China is gaming the markets a bit? More good. Fund outflows from US mutual funds totaled $8.4B for the week. Money leaves the market at the bottom. We have been putting it in and we are already taking gain off the table on this run. It always happens this way and is thus good news bigger picture and smaller picture for us right now.

More Good (had to make a new paragraph): Citi followed GE's Thursday announcement with its own 'we don't need no stinking federal funds' headline Friday morning. Copper and materials prices were up again. Michigan sentiment is thawing (56.6 actual versus 56.3 prior and 55.0 expected), another kernel of better economic data. Three-month LIBOR, after more than a month of gains, ticked down one one-hundredth to 1.32% from 1.33%. It had flattened the prior three sessions and made the first downside tick. Spark up the cigars.

TECHNICAL. Another soft start and a comeback. Not as impressive as Thursday where the indices rose arrow straight all session, but it had its own version. The indices dipped midday into lunch hitting session lows, but then they recovered and rallied on into the close. Good intraday action all week.

INTERNALS. The indices were up modestly on the session and the internals matched the action. Breadth at 1.5:1. No new highs, few new lows. Volume faded back near average on NYSE and put in its first below average session on NASDAQ in over a month. It was Friday after a bear market rally took off, and there simply were not as many participants wandering Wall Street.

CHARTS. Not a lot of change in the chart patterns from Thursday, but as noted above, given the bear market and the sharp rebound this week from the downtrends, that is a victory in itself as the sellers did not come back even as SP500 continued to flirt with the November low. SP500 closed over that level, but not enough to really mean much. It will have to test it this week and then put some distance on it during a second run higher for the break to mean something and for the level to become support once more. NASDAQ moved up to its January low and is somewhat in no man's land above the December low yet below the 1500 level considered key. SOX broke free of some congestion, but it still has overhead resistance. It is, however, in a much better bargaining position heading into a test this coming week.

Speaking of tests, after the rush higher and to resistance the market is a bit extended and could face some downside early next week as the gains are tested a bit by some sellers. The market can do anything at that point. One of the ways we are going to be ready to take advantage of any move is to look at good stocks that test last week's move and then start back up. AMZN, DRIV, QCOM, ISIL and others moved well and tested a bit Friday. If they test some more early in the week and start back up, groovy. We move in with more positions. Others, thankfully, are setting up to make new moves themselves. Need more leadership. If the sellers turn up with their axes and blowtorches, then we have to be ready to play the downside with those stocks that jerked higher in their downtrends to resistance. The market should have more upside momentum, and indeed that would be best for both the upside and the downside (more base building, a better point to play some downside, more base building), but if the rally rolls over time to jump to the downside quickly.

LEADERSHIP. There was leadership last week and from the same areas that were leading in December and into early January before the selling started returning ahead of the February gutting. Chips were the one clearly identifiable leadership group. Metals were not bad though a little less flamboyant. Techs are not all pulling together, but they are trying to get to that point. China stocks remained solid. Some smaller business services stocks that led the early moves off the November and December lows (e.g. BR, HMSY) were up. If there was a bigger sector for guns it would have led as SWHC (Smith & Wesson) surged on fears of an attempt to disarm the populace. Sounds alarmist, but given the Supreme Court's 5-4 gun decision last session, nearly taking away a right we have held for 233 years, with this Congress many are quite concerned. Bottom line: Leadership is trying to improve and is improving some. This action is working to build some bases and that is what the market needs. Chips are out front as they were in late 2002 when the market bottomed out of that bear market. Some retailers are moving up as they did at that time as well (e.g. AMZN). Similarities.