主题：04/03/2009 Market View -- 宁子

SUMMARY:

- Upside resilience continues.

- ISM services backsliding some after trying to turn the tide.

- LIBOR Resumes its improvement.

- Lagging indicator's leading indicator is not promising for jobs.

- Market extended or just starting its next leg? Earnings season is the next big indicator.

Market holds tough as buyers use dips to do what buyers do.

The big news of the morning, the jobs report, was in line, and with the whisper at -700K and more that was something of a win. Sort of. Modestly higher futures ahead of the number remained modestly higher afterwards as a quick spike fizzled and the status quo resumed. The jobs report was not as bad as expected, and while that can propel the market higher at times, after the kind of run stocks have put in off the March low, it takes more than a not as bad as feared economic report to send stocks rampaging again. Thus there was no new big surge Friday similar to the Thursday upside juggernaut. RIMM's earnings got the large cap tech juices flowing along with once again the semiconductors, and steel stocks as well as retail were up again, and okay, so was GS. Basically the leaders were leading again. But outside of those . . . there was not the same hoopla as on Thursday.

Stocks opened upside and after a short spurt the sellers took a shot. We all knew they would given the run higher and the weak jobs report. Sellers are probing for their opportunity and they sent out a recon team early in the session. The ISM Services was less than expected and below February and stocks slid lower, but then bounced along in a range until lunch. Must have been a 3-martini lunch because stocks were jovial the rest of the day, rallying to the session high as lunch ended, then to new session highs mid-afternoon. With that kind of recovery the sellers took another shot. A few minutes into the last hour we saw the same kind of selling seen in the prior closing hours last week. Stocks sold steadily, but when they high the lunchtime high they reversed and bounced in the last half hour to yet new session highs.

That is a long description of the of the events of the day, but the bottom line: the entire week showed resilience. After Monday butt-kicking gap lower, the indices held support and started a weeklong solid recovery to higher highs on this leg. Each time the market looked about to get its tail caught in the door the upside bias asserted itself. Sure it got some help from the mark to market changes announced on Thursday and the anticipation of that news earlier in the week. But it also overcame a really bad ADP report on Tuesday, reversing a gap lower that session. It rallied in the face of adversity, it held onto gains, and it moved higher even on Friday when there was not a lot of reason to move higher. There is a definite upside bias and continuing resilience, but the sellers are also there, probing for the opportunity to sell into an upside move that may be a bit extended. They are likely to have more success after earnings get underway, but if there are more than a few bad warnings next week they could step in earlier. The key, as always, is whether the sellers can just push a normal pullback after a good run or if they can really get violent and wreck the moves in the leaders. Given the resilience shown of late you would anticipate more of a normal pullback to support but it always helps to stay vigilant.

TECHNICAL. Bounced around from modestly higher to modestly negative and then rallied to 1% to almost 3% gains on the close. Shook off a couple of selling attempts again to close at session highs. Resilience.

INTERNALS. Modest breadth (2:1 NYSE, 1.5:1 NASDAQ) that pretty much matched the action. Volume, however, was much, much lower. Way lower, not even reaching average. There was no real driver, but the market still moved higher into the close. There is that upside bias noted above. But . . . the entire week moved on low volume outside of Thursday, the Mark to Market session. Without additional volume coming in the move has an increasing probability of running out of upside gas and making a test back much more quickly even though it looks as if a second leg to the March rally just started. Now the low volume was good on the downside sessions as there was no distribution, and we did see rising volume on the upside sessions. That is a positive as it shows the buyers are stronger, but again, the volume was not as strong overall. In other words the buyers were stronger but the number of players was smaller, kind of like 7 on 7 football versus 11 on 11. When everyone gets on the playing field things can change in a hurry.

CHARTS. NASDAQ put some more mileage on 1600 and the February high, making that higher high so critical to new rising uptrends. It is moving on up to the January high, the last peak before the serious stuff in early November. SP500 rallied again, but even though it closed higher, it was still below the Tuesday intraday high that tested 850 resistance. Still more work to do there. The lighter trade tells us the Friday moves didn't mean a whole lot other than the continued upside bias currently in the market. Well, not for all indices. SOX broke through its November peak, meaning it has hit a new high for the recovery attempt, a very important move. The indices may be a bit extended as they only took three and one-half days off from the three week run off the March low, but this can also be just the start of a new leg in the rally. See the Leadership section below.

LEADERSHIP. Chips came to life Thursday along with the techs, and that really boosted the market. They were joined by commodities as well after the Thursday 'we are back baby' statement about its economy. Very good to see them back in the game. True some leaders are a bit extended, e.g. the China stocks that exploded higher again, but many leaders have made good pullbacks and are embarking on another leg. DRIV, BIDU, CME, WFR, and BRCM are quality stocks that can lead higher and just got started on new moves. There are some key financials that have rallied and are now in a two week lateral move, starting to break higher (e.g. JPM, GS). They too can help lead higher while other leaders take a rest. Many view the market as extended at next resistance, and it is somewhat, but if new and not so new leaders keep pushing to the front as happened when the techs and chips re-engaged late in the week, the market finds new fresh legs. Indeed, we felt the market was done this week but it kept moving higher, making us money. That is why we always think about what COULD happen but watch the market for the 'buy me' and 'sell me' indications as to what will happen. We still like what we see in the leaders but have an eye on the lower volume the past week.