主题：04/13/2009 Market View -- 宁子

SUMMARY:

- Financials, commodities jump by themselves, waiting on techs, chips to react.

- Economic data to pick up the pace a bit but earnings are garnering the attention.

- Goldman announces early behaves well considering a $5B stock offering.

- Indices holding gains into earnings, looking for a new spark to take on next resistance. We will see if GS can drive stocks further into earnings season.

Market gets support from financials, commodities until others come to their aid.

Monday the financial stations were pretty desperate for news. Many foreign markets were closed and thus there was just not a lot to excite investors. ESRX and WLP announced the former would purchase NetRx for almost $5B; not a small deal but the reaction was almost 'so what?' outside those two companies. STX increased its revenue forecast but it did nothing. The bank stress tests are underway, but that didn't seem to bother the financials. It is as if the stress test is pass/fail with 50 being pass. Not a lot of worries there. You want to know how slow things were? YHOO and MSFT and their partnership/joint venture/buyout were back in the headlines. You know someone pulled that out of the 'use in case of a slow news day' file to fill out the morning hour.

Stocks opened lower overall and traded lower into midmorning. Our midmorning alert noted this time was often the fulcrum for a new intraday move and that turned out to be the case. Often when the first move is countertrend the midmorning period will lead to a turn back to the prevailing trend. Monday held true to that as financials and commodities reversed off the early lows and moved higher to positive ground. Mid-afternoon the indices broke the prior session highs (another way of saying they turned positive) as the techs, chips, industrials and other sectors recovered as well.

Looked pretty decent until the last 15 minutes when the bids were pulled and the indices slid back to mostly flat. Volume was very light; it was easy to push the indices around. All in all, however, it was a decent session as stocks held the Thursday gap gains as a result of the WFC earnings pre-announcement. To hold gains post-Friday holiday, coming back from negative, is not bad action. Not convincing in itself, but it shows the continued market resilience, that old upside bias in the lack of any major driving force.

TECHNICAL. Intraday the action was low to high with a turn positive though some late weakness pushed the NYSE indices sans SP500 back to negative. SOX never made it to positive on the session though it put in the effort. When techs and chips get back into the game similar to a couple of weeks back the action could be explosive once more.

INTERNALS. Breadth was so-so but it was also positive, not bad for a negative to positive/flat reversal session. Would have been hard to keep up the 6:1 pace from Thursday. Volume was quite weak yet again. Thursday trade spiked on the WFC news (though NASDAQ remained low overall), but Monday it was back down to last week levels, i.e. below average. That shows fewer players in the market right now. There was no distribution on the early selling, but there was also no accumulation on the later upside. Just another low volume session that doesn't tell you a whole lot about renewed strength or weakness given the numbers were low, but it does show the upside bias remains as stocks did recover to positive (for the most part) off the lows.

CHARTS. Up and down action, but no relative change after last Thursdays gap higher and taking on or taking out next resistance as the case may be. NASDAQ is still over the January close as is NASDAQ 100, and SOX is still holding over the November high. SP500 remains just below the twin January/February twin peaks at 875. That is of course next resistance after 850, but there is a range of resistance from 875 to 920, then 950. Right now SP500 is at a key level, the October lows at 850; yes it is over those levels as of the close but it is not a done deal so to speak. There is a moving average crossover, i.e. the 18 day EMA crossing up over the 50 day EMA. That is a good intermediate trend confirmation, but the overall trend on SP500 is still down and there is still a lot of overhead to bust through. Why so much on the SP500? Because the financials were the albatross around the market's neck from September to March. Their recovery has coincided with the market's recovery. Techs and chips are very important and industrials show faith in the future, but they could not do it alone.

LEADERSHIP. Key financials were up again (e.g. MS, GS, JPM) though indeed most financials were up, key or not. Steel and copper continued their moves, pulling most of the related stocks with them. China stocks surged (e.g. SINA, SNDA). Technology and chips lagged, but they came back nicely off the early selling. Leadership is as leadership often is in upside moves: some sectors are moving well while others take a breather and others continue working on their bases, getting ready to join the action. As noted above, if the techs and chips get back in the game again the move can be explosive as it was a couple of weeks back.