主题：03/25/2009 Market View -- 宁子

MARKET SENTIMENT

After spiking into the eighties during the selloff in Q4 2008 the VIX has settled back down, trading in a range from 40 to 55ish the past four months. That is still a high level for what is considered normal, i.e. 20 to 30.

Now some are saying that because VIX has settled in this range that it is anticipating more big moves, implying but not saying that the moves will be downside. 'Watch out' and 'be careful' are a couple of phrases often associated with VIX comments.

In 2002 VIX never got this high, reaching only into the fifties. Gloom was still high and things were quite dicey then as well. It fell to thirtyish on the initial rally, rebounded to 40 or so on the test, and then started a steady decline as the market rallied in a new bull run.

The point is that yes the VIX remains elevated, but just because it is holding higher does not mean a violent move to the downside is coming. It does tell you that because of the continuing uncertainty with respect to government intervention and attacks on contract law and capitalism prices are going to remain higher. It has a hard time pricing in government action because that action is often whimsical, sudden, and damaging. So, the market is pricing that in with the higher VIX. Thus to us this is not saying 'watch out', at least not with respect necessarily to a massive market decline. It is saying 'watch out' with respect to the unknowns and that many different scenarios can play out.

So, what do you do? You watch leading stocks and how the market handles the hurdles it faces. VIX is a secondary indicator and, as are all indicators right now, it is telling you to be cautious. The market still has massive amounts of overhead and resistance to deal with so you are damn right you still need to be cautious, VIX or no.

VIX: 42.25; -0.68

VXN: 41.35; -0.82

VXO: 43.11; -0.33

Put/Call Ratio (CBOE): 0.86; +0.1

NASDAQ

Stats: +12.43 points (+0.82%) to close at 1528.95

Volume: 2.404B (+21.33%)

Up Volume: 1.545B (+1.014B)

Down Volume: 918.333M (-561.259M)

A/D and Hi/Lo: Advancers led 2.3 to 1

Previous Session: Decliners led 2.28 to 1

New Highs: 16 (+1)

New Lows: 22 (+4)

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

Quite the trading range, running up and down 66 points before settling just above the halfway mark in the range. That kept it over 1500 support and still smack in the middle of its December to early February range. A doji on the candlestick chart is not bad action as NASDAQ stretches out laterally and forms something of a handle consolidation here.

NASDAQ 100 (+0.19%) is showing the same action and is setting up an even better pattern than NASDAQ.

SOX (+2.67%) surged to a new post-November high (240) but then fell back to basically flat, unable to hold the move. Still very solid, still in position to make the break, but thus far it has not made the breakout from the range. That move is going to be one of the seminal moves for the market as SOX was and is the leader off of the lows.

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

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

SP500/NYSE

Stats: +7.63 points (+0.95%) to close at 813.88

NYSE Volume: 1.774B (+7.81%)

Up Volume: 1.172B (+894.497M)

Down Volume: 587.892M (-770.195M)

A/D and Hi/Lo: Advancers led 1.95 to 1

Previous Session: Decliners led 2.01 to 1

New Highs: 16 (-1)

New Lows: 91 (-3)

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

Rallied up past the Monday high but hit the 90 day SMA (830) on the high and faded back to the 50 day EMA on the low and then rebounded to close in the middle. Still in the lower quadrant of the January/February range. Still hanging over the key 800 to 805 level it broke Monday. Still many layers of resistance on up to 900ish. SP500's break over 805 was a bullish move. It was not the move that changed SP500's character. It is still on a rally off the bear market low and it is still trying to handle resistance in its face. It is showing some good character, but each session is a new character builder.

SP600 (+2.12%) showed similar action, recovering some of the Tuesday loss and holding above resistance it broke through the past week while bumping the next resistance overhead. If it holds this test of the prior resistance that then becomes more solid support. Having a fight here as well.

DJ30

Noted this earlier, but quietly the Dow has gone from downside leader in the selloff to laggard in the recovery, to potential leader in the rebound. It surged through the 50 day EMA Monday and is testing in a narrow range the past two sessions, testing over the November low on the Wednesday intraday low then recovering. It is setting up for a run to 8000 and there is a lot of resistance starting at that point. What it does at that level will be very key to the rebound rally for the market as a whole. That is how important DJ30 is becoming here.

Stats: +89.84 points (+1.17%) to close at 7749.81

Volume: 454M shares Wednesday versus 379M shares Tuesday. Low volume on the Tuesday selling, a nice surge in above average volume on the Friday upside.

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