主题：03/26/2009 Market View -- 宁子

MARKET SENTIMENT

VIX: 40.36; -1.89

VXN: 40.58; -0.77

VXO: 41.43; -1.68

Put/Call Ratio (CBOE): 0.92; +0.06

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: 28.9%. A fraction more bulls (28.4% last week) but not really commensurate with the market gains. Not a lot of belief in it just yet. 29.7% three weeks back, down from that 'optimism' 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: 43.3% versus 44.3% the prior week. Slowing the decline from 47.2% as here as well there were not many believers in the run higher. 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: +58.05 points (+3.8%) to close at 1587

Volume: 2.514B (+4.59%)

Up Volume: 2.451B (+906.133M)

Down Volume: 147.226M (-771.107M)

A/D and Hi/Lo: Advancers led 4.23 to 1

Previous Session: Advancers led 2.3 to 1

New Highs: 24 (+8)

New Lows: 16 (-6)

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

Big volume as NASDAQ continued its run toward 1600, covering the majority of the ground left in just one session, leaving it just 13 points away. As noted above, this strength indicates NASDAQ will give the January peak at 1653, the post-November high, a run on this move and not after a test. That would be fine. The closer it gets to that level on this run the better the position to test, make a higher low, and make another run at it. The market leader along with SOX and it is appropriate it is challenging the high on this move.

SOX (+5.91%) blew through the January high and is heading to the November peak (248), just 3 points away. Now we don't want to see it stall there but shoot on through, allowing the other indices to hit resistance, and then come back to test its breakout to a second higher high.

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

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

SP500/NYSE

Stats: -18.98 points (-2.33%) to close at 832.86

NYSE Volume: 1.81B (+2.04%)

Up Volume: 1.319B (+146.85M)

Down Volume: 480.994M (-106.898M)

A/D and Hi/Lo: Advancers led 3.86 to 1

Previous Session: Advancers led 1.95 to 1

New Highs: 18 (+2)

New Lows: 91 (0)

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

SP500 cleared the 90 day SMA (829) on the close, moving further into the January and early February range, trading roughly midrange right now. While SOX breaks out and NASDAQ rallied toward its post-November highs, the large caps are still trying to get into the top half of the range from the November low to the January peak. Serious resistance at 850, 875, then 900 to 910. May not make the latter tranche, but 850 to 875 is definitely within range. Bulls want to see it over 850 so it can come back and test that level versus a straight drop to 805 on another test.

SP600 (+4.45%) surged to the 90 day SMA with a strong move, but similar to SP500 it has lagged and finds itself in the lower half to just about the halfway point in the November low/January high range. 250ish is serious resistance and that is still 16 points away, a long run for SP600. It is putting in strong days, but it is still following the leaders in tech and chips.

DJ30

Another solid session has pushed the Dow to 75 points from 8000 where there is resistance on up to 8175. Volume backed off as the move loses a bit of strength but still momentum moving up toward the 90 day SMA at 8030. Likely to find resistance over the next few sessions in this range as it bumps the bottom of a seriously tight and orderly January to early February consolidation range with a bottom near the 8000 level. A punch on up to 8250 or so would be a good showing from the Dow with its new found strength.

Stats: +174.75 points (+2.25%) to close at 7924.56

Volume: 397M shares Thursday versus 454M shares Wednesday. After very strong upside volume on the moves higher, trade slipped below average Thursday on a solid 2+% price gain. Not the same strength as shown in prior moves but not discounting the Dow's show of strength due to one session of gains on lower trade.

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