主题：04/15/2009 Market View -- 宁子

MARKET SENTIMENT

VIX: 36.17; -1.5. VIX made a lower closing low after last week's gap lower. It is starting to fade as it takes out a lot of the government-related fear that was propping VIX higher simply because the market did not know what was coming out of Washington next. Now it is pretty clear the direction we are going.

VXN: 38.31; -1.12

VXO: 37.97; -1.81

Put/Call Ratio (CBOE): 0.93; +0.17

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: 36.0%. Sharp jump in the bulls, moving back above 35%. Below 35% is a bullish indication. Above is not so bullish but is not bearish until higher levels. 31.0% the prior week up from 28.9%. Still well below the 43.0%, the prior top of the recovery as the market rallied off the November low. 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: 37.1%. Fewer bulls but not a commensurate fall compared to bulls and their rise (38.0% last week). Big drop from 43.3% and 44.3% before that. The decline was slowing its fall from 47.2%, the peak for the run this year but no more. 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. Bearishness hit a 5 year high at 54.4% the last week of October 2008. 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: +1.08 points (+0.07%) to close at 1626.8

Volume: 1.985B (-8.98%). Down most of the day so the low volume on the session was not bad. Overall it is not great, but Wednesday it was not bad and as noted the move can continue on low volume for quite some time.

Up Volume: 896.03M (+69.893M)

Down Volume: 1.143B (-274.932M)

A/D and Hi/Lo: Advancers led 1.7 to 1. Not bad at all given the modest gains. A few big boys were holding the index lower.

Previous Session: Decliners led 2.03 to 1

New Highs: 7 (-8)

New Lows: 14 (+4)

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

As noted, not bad action at all, tapping the 10 day EMA and the February and December peaks on the low and holding nicely. It is above that 1600 level that it used perfectly as support Wednesday, but it also has the January high at 1661 it has not taken out. Whether it breaks 1600 or 1661 as the next move is where the story is told for NASDAQ.

NASDAQ 100 (-0.44%) suffered because of INTC and some other big chips. Nonetheless it tested lower toward the January and February peaks and then recovered to positive, holding over the 10 day EMA. Looks quite good.

SOX (-1.51%) took its lumps thanks to INTC and AMAT, but it did hold over the 18 day EMA and closed just over the 10 day EMA. It still has higher highs and it did a good job of redeeming itself in the face of bad news. Need it because chips are the leader off the market bottom having never come back in March to make the lower low the other indices (outside of NASDAQ 100) did.

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

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

SP500/NYSE

Stats: +10.56 points (+1.25%) to close at 852.06

NYSE Volume: 1.48B (-15.39%). As with NASDAQ the volume was significantly lower and thus no accumulation on the rebound. No distribution on the selling, but again, overall light trade on this last move higher.

Up Volume: 1.069B (+550.358M)

Down Volume: 401.149M (-809.783M)

A/D and Hi/Lo: Advancers led 2.32 to 1. Was positive all session despite early losses.

Previous Session: Decliners led 2.14 to 1

New Highs: 8 (+1)

New Lows: 44 (-11)

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

Nice lateral action over the 10 day EMA (836) as SP500 tests back after hitting at the 850ish resistance Friday. Holding up well though the Tuesday volume was higher, but the Friday trade was solid. Looking at the JPM earnings Thursday morning to see if it can provide leadership for the financials after GS reported good results but then the huge stock offering. Positioned well for a run at 875 to 900, but it needs a catalyst to get the financials running again. As with NASDAQ it is over support at 800 to 825 but below resistance; it is surrounded and will make a break after this nice test.

SP600 (+1.46%) recovered from the Tuesday drubbing, holding the 10 day EMA on the low and recovering positive. That kept it over the early April peak and sets it up for a run at 250. If it can clear that (6 points away) it has a shot at 275. A lot depends upon the financials.

DJ30

Held the 10 day EMA near support and rallied back above 8000, the level so many are looking at. Very similar to the other indices: it is holding some support at 7875ish while looking at the late January and early February peaks at 8406 and 8313, respectively. DJ30 can trade up to those on a move off this level, and that will then really tell the upside story, i.e. if it can break through those levels that would be bullish.

Stats: +109.44 points (+1.38%) to close at 8029.62

Volume: 413M shares Wednesday versus 513M shares Tuesday.

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