主题：03/18/2009 Market View -- 宁子

Jobless claims, Leading Economic Indicators, and Philly Fed PMI are out Thursday and the first and third will garner most attention. We are interested in Philly after the poor New York showing to start the week.

As with the economic data Wednesday, these reports are important, but the big cheese is still the Fed's action and whether the shorts feel obligated to cover or otherwise unwind their shorts or if they take the Fed's action is just another federal government attempt in a long list of attempts that have failed and figure a 20% rally on SP500 is enough to sell into.

Said it above, but after the Fed action more than usual for any Fed action, we have to see how the market reacts. The market is typically down right after an FOMC meeting, but this was no typical FOMC meeting. Shorts may want to cover some more. Then again, the market action after the FOMC announcement shows that the sellers sold into the euphoria. With SP500 still below 800 and NASDAQ below 1500 after both ventured into those areas intraday, the action was not an overwhelming affirmation of a further run higher.

Thus we have to keep our options open for new positions. Upside is a bit extended and riskier after such a solid move higher, but that doesn't mean the upside won't still come to the market even from here. We have upside in some interesting areas showing life that did not participate in the recent rally, e.g. metals and commodities. There are also some excellent techs and chips in position to lead the next wave higher. If they show strong gains and the market shows resilience again, then we can pick up some of those positions.

We also need to be looking for some downside. There are many stocks, including some of the indices, that have rallied back to key resistance, and if the Fed did not change the game and force more short covering, these should start to struggle here. SP500, DJ30, AAPL are a few examples. The question is, do you go ahead and jump in on them before you see the real impact of the Fed action? Tough call. We will look at some good set ups to the downside however, and if we get good moves we can look their way. Some stocks did not move well at all during the rally and are at resistance (e.g. OCR), and they can easily sell off on any weakness.

In sum, the Fed action is another government action trying to change the game for the markets. The post-FOMC action was not convincing it did that. How shorts respond over the next couple of sessions tells us more about how effective the Fed was in its attempt. It is expiration week and that makes reading the tea leaves even more difficult. Nonetheless, if some upside presents itself for good patterns, we will take it. If some downside presents itself, we will take it. In either case we will view the play as more short term until the market shows more direction, moving in, taking a gain, getting out of Dodge. As for existing positions we will let them run upside if the market shows continued resilience, but we have moved up the stops after taking some profits the past several days. If we get stopped out with a smaller gain on these remaining partial positions that is okay. We will get back in if the market shows us we should get back in.

Support and Resistance

NASDAQ: Closed at 1491.22

Resistance:

1493 is the October 2008 low & late December 2008 consolidation low. Cracking but not broken

The 90 day SMA at 1494

1505 is the late October 2008 closing low.

1521 is the late 2002 peak following the bounce off the bear market low

1536 is the late November 2008 peak

1542 is the early October 2008 low

1569 is the late January 2009 peak

1598 is the February 2009 peak, the last peak NASDAQ made

1603 is the December peak

1620 from the early 2001 low

1644 from August 2003

1666 is the January 2009 peak

Support:

The 50 day SMA at 1470

1460 is the February low

The 50 day EMA at 1460

1434 is the January low (1440.86 closing)

1428 is the mid-November 2008 low

The 18 day EMA at 1409

1398 is the early December 2008 low

1387 is the 2001 low

1316 is the November 2008 closing low

1295 is the November 2008 low

1271 from is the March 2003 low, 1253 intraday

1262 from July 2002

1192 is the July 2002 intraday low

1114 is the October 2002 low, the bear market low

S&P 500: Closed at 794.35

Resistance:

The 50 day EMA at 794

800 is the March 2003 post bottom low

The 50 day SMA is at 804 tapped on the Wednesday high.

805 is the low on the January 2009 selloff. KEY Level

815 is the early December 2008 low

818 is the early November 2008 low

The 90 day SMA at 836

839 is the early October 2008 low

848 is the October 2008 closing low

853 is the July 2002 low

857 is the December consolidation low

866 is the second October 2008 low

878 is the late January 2009 peak

889 is an interim 2002 peak

896 is the late November 2008 peak

899 is the early October closing low

919 is the early December peak

944 is the January 2009 high

Support:

768 is the 2002 bear market low

752 is the November 2008 closing low but it is not broken and done away with

The 18 day EMA at 751

741 is the November 2008 intraday low

722 is a December 1996 low

681 is the June 1996 intraday peak, 673-71 closing

665 from August 1996

656-654 from January, April 1996

607-05 from November 1995

Dow: Closed at 7486.58

Resistance:

7524 is the March 2002 low to test the move off the October 2002 low

7552 is the November closing low. KEY Level.

The 50 day EMA at 7630

7694 is the February intraday low

7702 is the July 2002 low

7867 is the early February low

7882 is the early October 2008 intraday low. Key level to watch.

7909 is the early January low

7965 is the mid-November 2008 interim intraday low.

The 90 day SMA at 8103

8141 is the early December low

8175 is the October 2008 closing low. Key level to watch.

8197 was the second October 2008 low

8419 is the late December closing low in that consolidation

8451 is the early October closing low

8521 is an interim high in March 2003 after the March 2003 low

8626 from December 2002

8829 is the late November 2008 peak

8934 is the December closing high

8985 is the closing low in the mid-2003 consolidation

9088 is the January 2009 peak

Support:

7449 is the November 2008 low

7282 is the October 2002 closing low in the prior bear market.

7197 is the intraday low from October 2002 bear market

7115 is the February 2009 closing low

The 18 day EMA at 7191

7008 from February 1997 closing peak

6528 is the November 1996 peak

6489 from December 1996 closing peak

6356 is the April 1997 intraday low

Economic Calendar

These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.

March 16 - Monday

March Empire Manufacturing (8:30): -38.23 actual versusl -32.0 expected, -34.65 prior

Net Long-Term TIC Flows, January (9:00): -43B actual versus $34.8B prior

Capacity Utilization, February (9:15): 70.9% actual versus 71.1% expected, 71.9% prior (revised from 72.0%)

Industrial Production, February (9:15): -1.4% actual versus -1.2% expected, -1.9% prior, revised from -1.8%

March 17 - Tuesday

February Building Permits (8:30): 547K actual versus 500K expected, 531K prior

Housing Starts, February (8:30): 583K actual versus 450K expected, 477K prior

Core PPI, February (8:30): 0.2% actual versus 0.1% expected, 0.4% prior

PPI, February (8:30): 0.1% actual versus 0.4% expected, 0.8% prior

March 18 - Wednesday

February Core CPI (8:30): 0.2% actual versus 0.1% expected, 0.2% prior

CPI, February (8:30): 0.4% actual versus 0.3% expected, 0.3% prior

Current Account Balance, Q4 (8:30): -$132.8B actual versus -$136.7B expected, -$1.81.3B prior

Crude Oil Inventories, 03/13 (10:30): +2M actual versus +749K prior

FOMC Rate Decision (14:15): No change in rates, big facilities announced.