主题：03/23/2009 Market View -- 宁子

MARKET SENTIMENT

VIX: 43.23; -2.66

VXN: 42.01; -2.65

VXO: 42.86; -3.55

Put/Call Ratio (CBOE): 0.7; -0.19

Bulls versus Bears:

This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market doesn't have the cash to drive it higher.

This is a historical milestone in the making. Bulls are impressively low considering we are in general a very optimistic country. The few bulls is a positive indication because it means most everyone that is getting out is out and there is money on the sidelines. In other words the ammunition boxes are full and as the market recovers investors will start opening up the boxes and firing. Little by little they will be forced to put more money into the market and there will be some rushes higher in fear they are missing the train. You relish times when sentiment is so negative because it means some tremendous buys are setting up. This could indeed be the opportunity of a lifetime, and you take advantage of it by buying quality stocks and letting them work for you as long as they will. If we can hold them for years, great.

Bulls: 28.4%. Nothing like a rally to bring around the bulls, but not a very big run from 26.4% last week and not even hitting the 29.7% from the week prior. Not a lot of confidence just yet and that is fine. Still well down from 43.0%, the current top of the recovery as the market rallied off the November low. A rise from 25.3% in December and quickly starting to fall once the market encountered the January selling. Bullishness bottomed on this leg lower at 21.3% in November 2008. This last leg down showed us the largest single week drop we have ever seen, falling from 33.7% to 25.3%. Hit 40.7% on the high during the rally off the July 2008 lows. 30.9% was the March low. In March the indicator did its job with the dive below 35% and the crossover with the bears. A move into the lower 40's is a decline of significance. A move to 35% is a bullish indicator. This is smashing that. For reference it bottomed in the summer 2006, the last major round of selling ahead of this 2007 top, near 36%, and 35% is considered bullish.

Bears: 44.3%. Bigger drop for the bears, falling from 47.2%. Very solid still, showing plenty of worry. 47.2% is the peak for the run this year but is still below the December and October peaks. Hit the 34's on the lows, falling from 38.5% and 46.2% in mid-December. Still above the 35% level considered bullish for stocks, but as with bulls, still well below the level considered bearish for stocks. Bearishness hit a 5 year high at 54.4% the last week of October. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment on this move. 35% is the level that historically indicates excessive pessimism. As with the bulls the jump in bears did its job after hitting 44.7% in the third week of March. Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). This is a huge turn, unlike any seen in recent history.

NASDAQ

Stats: +98.5 points (+6.76%) to close at 1555.77

Volume: 2.184B (-13.05%). Lower, below average volume on this move.

Up Volume: 2.101B (+1.738B)

Down Volume: 143.263M (-1.905B)

A/D and Hi/Lo: Advancers led 5.11 to 1

Previous Session: Decliners led 2.12 to 1

New Highs: 10 (+1)

New Lows: 13 (-24)

NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg

Gapped higher off the 50 day EMA and surged through the next resistance from 1500 to 1515. It is now in the heart of the December to early February range from 1500 to interim highs at 1600, and then the January post-November peak at 1666. A potential big double bottom has formed from November through present, but first things first. NASDAQ is fighting its way off the lows and 1600 is next. A pretty good point to form a handle but we will have to see how it plays out given the decline in volume Monday as NASDAQ surged through that key initial resistance point.

SOX (+7.20%) broke over the February peak and is within a point of the January peak. Chips remain the overall backbone to the market, holding the best pattern and leading early on. Financials are necessary, but chips kept things glued together as financials sold off.

NASDAQ 100 CHART: http://investmenthouse.com/ihmedia/NASDAQ100.jpeg

SOX CHART: http://investmenthouse.com/ihmedia/SOX.jpeg

SP500/NYSE

Stats: +54.38 points (+7.08%) to close at 822.92

NYSE Volume: 1.917B (-22.28%). Lower volume on NYSE but still very respectable trade levels following expiration week.

Up Volume: 1.866B (+1.354B)

Down Volume: 46.994M (-1.9B)

A/D and Hi/Lo: Advancers led 7.67 to 1

Previous Session: Decliners led 2.86 to 1

New Highs: 14 (+10)

New Lows: 76 (+30)

SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg

After two tries SP500 broke through 805 and put some mileage on it, moving into the bottom quarter of the December to early February trading range. A two-day respite and it was back at it, now looking at next resistance at 850ish. One step at a time and it is taking those steps. Still has to turn the pattern around and wade through this next resistance so we take it a move at a time and a week at a time. Important break and now we see if it can work to turn former resistance into support.

SP600 (+8.04%) came off its higher low that tested the November low with a vengeance, moving through the 50 day EMA and up to the January lows on that solid NYSE volume. Good action with the test and rebound and we will ride the move as long as it continues to show the volume and new leadership it is finding.

DJ30

The Dow enjoyed some success of its own as its financial and tech components took off upside. It cleared the November closing low and the 50 day EMA on solid volume. Of course it is not even in the January consolidation level but a good strong break as DJ30 follows the other indices higher.

Stats: +497.48 points (+6.84%) to close at 7775.86

Volume: 515M shares Monday versus 672M shares Friday. Lower but still solid upside volume as the Dow shows good buying.

DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg