主题：04/01/2009 Market View -- 宁子

SUMMARY:

- Market shows resilience, rallies from a slow start, overcomes last hour selling attempt.

- National ISM tops expectations, turns up from lows for past two months.

- Status of the recession: making the mistakes of the past in the present.

- Showing some toughness at a key level, and if techs and chips can re-engage the rally can put in a second phase.

SP500 rallies right back over resistance, showing more strength than expected.

There was not a lot of early news but what was out there didn't sit well with the pre-market trade. The ADP monthly jobs survey reported 742K job losses versus the -663K expected and the revised -706K prior. No improvement, but these jobs numbers are lagging. They are really bad, but they are lagging. Futures took a hit on that number and it was clear SP500 was going to head even lower below 800 at the open. The bell rang and it did just that. Cause and effect as they said in 'The Matrix Reloaded.'

A half hour into the selling some more data hit. I say selling, but it was more of a choppy lateral move after the initial open lower. Clearly the buyers were not racing in to the rescue but the sellers, after opening things lower, were impotent to push things lower. The economic data at the top of the first hour of trade didn't provide any Viagra for the softening selling attempt. Pending home sales rose 2.1%, topping expectations and January's -7.7% bomb. The ISM rose for the second month, racing to 36.3 versus 35.8 in February. The market took heart and recovered. SP500 rallied back to 800, paused, but then broke on through. It tested midday and rallied on up again. The rest of the market moved higher as well, riding DJ30's new found strength and SP500's ability to top resistance. NASDAQ and SOX lagged, but they were not out of the picture.

The indices broke to new highs and SP500 topped the Tuesday high with a couple of hours left. Then the sellers made their second run of the day. At the stroke of the last hour sell programs hit and took SP500 back to 802 in a quick 12 minute drop. Didn't look positive. Then the SP500 surprised us and showed some more stickiness at that support. It turned and rallied back, closing at 811. NASDAQ and SOX lagged all session but they caught a bid in that rally off the selling attempt. Seems buyers were waiting for another opportunity and that selloff gave them a wedge and the drove it home. Some really good moves emerged as the indices posted 1.25% to 2% gains. Not bad given the weak start and the reversal that was needed.

It was a solid though not a huge session, but it did show character. First, the market fought off a weak open to start the new quarter as no new money came in, bouncing back and moving back over 800 and 805 resistance. Second, SP500 was pushed back down with some stout selling in the last hour, but it came right back and held the gains, closing at the session high. When faced with adversity the market kept coming back.

TECHNOLOGY. Intraday the action was solid as noted. Weak open, recovery and more, moving over resistance. A serious selling attempt late, but then another move by the buyers overran the sellers. Quite a change from the action seen from July through February.

INTERNALS. Decent but unspectacular breadth at 3:1 on NYSE and 2:1 on NASDAQ. It was a reversal session and there was some late chop so the breadth was lagging a bit. Volume was mixed again, but this time NASDAQ trade was on top while NYSE volume lagged well below average. NASDAQ trade managed to crack through average, moving up in the late rally. NASDAQ sure has the look of building strength for a new breakout, SOX as well.

CHARTS. As noted, SP500 is showing a lot more intestinal fortitude at the 805 level than we thought it had. Closed well below that level Tuesday and added to the downside early Wednesday before running right back up. NASDAQ is using 1500 as support as it trades in the top half of its range from December to February and looks to be building strength for a new breakout. SOX is similar, retaking the February high and trading in the top half or better of its range and looking ready for a new break higher as well. Quite a change from Tuesday as SP500 shows strength in the league of NASDAQ and SOX. As we said, if the financials can get on their game along with NASDAQ, the upside strength would be rather exciting.

LEADERSHIP. NYSE stocks led with financials such as banks, insurance, broker dealers scored solid gains. Techs and chips lagged as noted, but at the end of the day started to flex a bit of muscle with some key stocks running higher, e.g. AAPL, BRCM, QCOM, GOOG, TSM. Retail was again solid. A prior leader found some strength as commodities enjoyed an upside day after some pretty harsh sessions the past week.