主题：04/01/2009 Market View -- 宁子

MARKET SENTIMENT

VIX: 42.28; -1.86

VXN: 42.48; -1.72

VXO: 43; -1.4

Put/Call Ratio (CBOE): 0.91; +0.1

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: +23.01 points (+1.51%) to close at 1551.6

Volume: 2.2B (+5.71%)

Up Volume: 1.634B (+37.783M)

Down Volume: 541.143M (+7.901M)

A/D and Hi/Lo: Advancers led 1.9 to 1

Previous Session: Advancers led 2.15 to 1

New Highs: 13 (0)

New Lows: 20 (+5)

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

Gapped lower but held the support line running through the October low just over the 50 day EMA (482) and then rebounded for a decent gain. Gee, 1.5% is just decent; the times we live in. Why back in my day, a 1.5% move would be good for half a years gain . . . You know the story. Just look at Europe's average annual GDP growth and you get the picture. Nothing near a breakout but a nice hold over support and a solid move higher as NASDAQ

Trades in the top half of its range, making higher lows and looking at a breakout.

SOX (+1.28%) bounced off the 18 day EMA (225) and moved back through the February high on the close. SOX lagged on the session, had a lackluster day, and yet it is making a higher low at the top of its trading range, ready for a new run higher toward 250 and the November peak. BRCM, TSM, MCHP many chips are in position for nice moves.

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

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

SP500/NYSE

Stats: +13.21 points (+1.66%) to close at 811.08

NYSE Volume: 1.503B (-8.29%)

Up Volume: 1.24B (-16.392M)

Down Volume: 254.485M (-109.83M)

A/D and Hi/Lo: Advancers led 2.96 to 1

Previous Session: Advancers led 3.09 to 1

New Highs: 8 (+1)

New Lows: 54 (+2)

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

Held the 18 day EMA (788) again as it did on Monday and bounced up through the 50 day EMA and 805. Nice action as SP500 shows more resilience than expected, but unlike NASDAQ and SOX, it is not near the peaks of the December to February range. Indeed, it has a tough fight ahead of it on through 850 to 900, but again, it is showing more strength than we gave it credit for as we looked to play the SPY and some financials lower. We are not giving up on those plays, however, though the fact that SP500 continues to hold up and attempts to break higher shows the buyers are not really able to take control just yet.

SP600 (+1.56%) is very similar to SP500, i.e. over the 50 day EMA but still in the bottom half of its consolidation range. It is trying to stretch out laterally and build a shelf to rally up through the January and February lows, something it could not pull off on its last run upside.

DJ30

DJ30 is still trying to assume the or at least part of the leadership mantle. It is making a higher low at the November low, trying to put in a floor to rally up and through 8000 so it can take on the late December and January peaks. One step at a time and this is a very nice test of the initial run off the March (and bear market) low, giving it the launch pad it needs to take it on up through next resistance and another consolidation level. Not bad at all.

Stats: +152.68 points (+2.01%) to close at 7761.6

Volume: 361M shares Wednesday versus 399M shares Tuesday.

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