主题：03/25/2009 Market View -- 宁子

SUMMARY:

- Sellers trash an early rally but the buyers use that to rush back in.

- UK can't sell its bonds, US has to pay more interest to move its debt as the price of wanton spending starts to show itself.

- Durable goods orders turn positive, January revised up.

- February new home sales rise 4.7% after January's record low pace.

- Still showing buyers ahead of quarter end.

Buyers still ready to move in.

Durable goods orders were much better than expected at 3.4%, the biggest gain in over a year. Futures were so-so until the solid report and they moved higher. Not surging, just solidly higher. Stocks started stronger, a good response to the Tuesday hangover. New home sales rose 4.7% and that spurred the move further. SP500 started at 806 and by midmorning the large caps rose to 826. Then an old habit came back, i.e. the midmorning slump. Stocks tested back and worked sideways for 2 hours. Made a short double top, a lower high just after lunch, showing its weakness. The UK had already held its bond auction and it failed to raise the money it wanted. Failed to raise the money. That is like holding an auction to sell the family jewels and no one shows up, showing you your jewels are fools gold. In early afternoon the US announced the results of its bond auction, and while it sold its bonds the required yield was pushed up to get the necessary demand.

On that news the lateral move turned into a hard fall, taking the indices to session lows and negative. SP500 fell to 791, a 36 point swing from high to low. Big move. Sellers were pushing hard. As fast as the selling pressure jumped the buyers stepped in. A knifepoint turn and stocks sprinted higher into the close, pushing SP500 to 814 and NASDAQ, after undercutting the important 1500 level (1487 on the low), rallied back to 1528. Not session highs, but recoveries as sharp as the selling.

And what is the grand meaning of it all? Sellers had the reason (weak debt interest for the UK and US) and the opportunity to sell, and for awhile they were doing it. They drove SP500 and NASDAQ down through key levels, but they popped right back up and on some solid volume as well. This shows buyers were at that level, ready to come in. It shows there are still buyers at this higher level ahead of quarter end.

TECHNICAL. Intraday a rollercoaster with early gains, a selloff to wipe it all off the board, then a surge back up. Not the usual session of late and it shows the sellers were probing a bit, seeing if the buyers had any resolve. Not the straight up move higher seen the prior two weeks and you can expect more as the earnings season approaches.

INTERNALS. Modest upside breadth in the 2:1 range. Not bad for a reversal off negative. Volume jumped nicely on the reversal though it was up a bit as the market sold off in the afternoon so it was not a clear cut surge of buyers piling in. Good action but not a blowout.

CHARTS. SP500 and NASDAQ made their way well into resistance after clearing it Monday. Could not hold it, however, but they were able to rebound nicely and take it back. As noted above, that shows buyers at that support, ready to jump in and drive them back up. Many feel they are missing this rally so there is still ready money ahead of quarter end. The candlestick chart showed dojis on all major indices, but that is okay as they tested support intraday and rebounded. NASDAQ 100 is setting up a cup with handle pattern, a bullish base. SOX is trying a new breakout from a lateral handle of its own. Even DJ30 is trying to become a leader, setting up a good base as well. There is still nothing but resistance overhead and it will be fight all the way up. There are buyers coming in ahead of quarter end and the move is thus finding support. The attempt at selling this afternoon, however, does show sellers are thinking about it, starting to mass a bit.

LEADERSHIP. Some China stocks showed some strength while others set up again. Some key financials were up as were some chips and tech. There was not a lot of power outside of a few movers such as SNDA, and many stocks were up and down with the market. Still, the leaders of late (tech, chips, China, key financials, energy, commodities) continued to set up nicely and more are setting up to step up.