主题：03/23/2009 Market View -- 宁子

After hours the SEC indicated that at its next meeting it would address the uptick rule with a review and an eye toward perhaps reinstating the requirement that short sales not take place but on an uptick in stock price. The idea is it would avoid the extensive bear runs that sent financials into the muck. That is debatable but it is something many are calling for. The next meeting? April 8. Once more we have to wait.

We also have to wait, though not as long, to see just how solid this move is. The Plan got the publicity for sending the market higher Monday, but there is another issue prompting some of this buying and that is quarter end window dressing. With the rally off the lows, the Fed action, and now the rally Monday, many of the funds are getting caught short when the market is rallying toward the end of March and the quarter. There is buying in these stocks so they will appear in the Q1 mailings. How long does it continue? As long as it takes the many shorts to get into some of these stocks. After that the market makes its next test. Not necessarily a bad thing but just part of the gears driving the move higher and one we need to be aware of when the market gets near the end of the month . . . and a new earnings season immediately following. Sounds like a recipe for a pullback but we will deal with that as it approaches.

Nearer term the market showed a strong move through next resistance, the next step in its move higher. Curious to see how it responds on the day after as a lot of shorts were covering again Monday after a 2-day pullback following the Fed's big announcement last Wednesday afternoon. The shorts were breathing a bit easier with a failure at resistance but then Monday they were gasping for breath again as stocks shot higher. We will see if the buyers back off again and the sellers try to come in, but if the funds believe that there is more life in this move they are going to continue to window dress some more and keep upward pressure on stocks.

As always when our positions surge we will look for opportunity to take some gain, and another big day or a couple of upside sessions will put a lot of stocks well into the money for us and allow us to bank some more on this second leg of the rally off the March low. We do view this as a second leg even with the volume issues on NASDAQ, given the market did take a pause before surging back up. Either way the market has moved well and as it continues we will take more gain.

We picked up some more shares Monday and as the market moves higher there are some others we can move into as well if they show us good solid moves. Lack of volume was a culprit for many on Monday despite good price surges. When the market explodes higher that is often the case. We will look at more upside positions as they present themselves but we will also watch the overall market after such a big surge. An early lull would be normal and allow for new buys, but you also want to be careful not to chase positions given the short rest and then the big surge.

Support and Resistance

NASDAQ: Closed at 1555.77

Resistance:

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:

1542 is the early October 2008 low

1536 is the late November 2008 peak

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

1505 is the late October 2008 closing low.

1493 is the October 2008 low & late December 2008 consolidation low

The 50 day EMA at 1465

The 50 day SMA at 1464

1440 is the January 2009 closing low

The 18 day EMA at 1436

1434 is the January intraday low

1428 is the mid-November 2008 low

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 822.92

Resistance:

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 832

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:

The 50 day SMA at 796

800 is the March 2003 post bottom low

768 is the 2002 bear market low

The 18 day EMA at 763

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

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 7775.86

Resistance:

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 8058

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:

7702 is the July 2002 low

7694 is the February intraday low

The 50 day EMA at 7614

7552 is the November closing low. KEY Level.

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

7449 is the November 2008 intraday low

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

The 18 day EMA at 7278

7197 is the intraday low from October 2002 bear market

7115 is the February 2009 closing low

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 23 - Monday

February Existing Home Sales (10:00): 4.72M actual versus 4.45M expected, 4.49M prior

March 25 - Wednesday

February Durable Goods Orders (8:30): -2.4% expected, -5.2% prior

Durables, Ex-Transportation, February (8:30): -2.0% expected, -2.5% prior

New Home Sales, February (10:00): 300K expected, 309K prior

Crude Oil Inventories, 3/20 (10:30): +1.942M prior

March 26 - Thursday

03/21 Initial Jobless Claims (8:30): 650K expected, 647K prior

Q4 GDP - Final, Q4 (8:30): -6.6% expected, -6.2% prior

GDP Price Index, Q4 (8:30): 0.5% expected, 0.5% prior

March 27 - Friday

February Personal Income (8:30): -0.1% expected, 0.4% prior

Personal Spending, February (8:30): 0.3% expected, 0.6% prior

Michigan Sentiment - Rev, March (9:55): 56.0 expected