主题：04/16/2009 Market View -- 宁子

SUMMARY:

- Choppy start but techs grab the lead and lead to a new post-November high.

- JPM solid earnings fail to ignite financials.

- Philly Fed better, but not enough.

- Still moving into earnings, leaders still making new post low highs, still looking for stronger volume, but also still riding the move higher.

Techs and chips take the lead, and the market needed them.

Lots of news. Lots. Earnings saw JPM beat but it struggled. NOK beat and it was up. Financials struggled, techs rose. That was pretty much the story of the session. LUV missed, BGG missed, but ATVI preannounced positive results thanks to 'Guitar Hero.' At least the kids can get lost in air guitar and drums as their futures turn into high taxes, high inflation, and a lower standard of living. Heard a figure today that kids today will each pay $135,000ish over their lives to pay just the interest on the debt taken on in the Obama three months of prudency. That doesn't include the massive amounts Bush heaped upon them with Medicare Part D, but at those levels who is counting, right?

Housing starts fell 10.8% after a 17.2% February gain. Easy come, easy go. Permits were pathetic as well at 503K versus 549K expected and 564K the month before. Jobless claims fell to 610K but continuing claims topped 6M for the first time ever (6.022M); the latter always gets worse before the former improves. Looks as if they are getting there. China reported GDP growth at 6.1%, enviable by most standards but the slowest growth in the land of the dragon in decades. Stocks started higher, but then the Philly Fed disappointed with a -24.4 reading. Better than the -35.0 March notched, but a rather sorry showing when the whisper was in the minus teens.

That led to a very choppy morning. Yes stocks gapped higher but they gave it back by midmorning in very halting trade. Fortunately for the market the techs and chips held up all morning while the financials struggled even with the JPM earnings, and in the afternoon they rallied the troops to some very respectable gains. Volume jumped on NASDAQ, moving above average as they broke to a new post low high. NYSE large cap indices managed much more modest gains and on rising but still well below average trade. There was no rush to the financials as the SP500 needed. Fortunately for the upside the techs made up for the lack of NYSE interest in something of a role reversal from Wednesday. More than that, however, as the techs moved to a new post-November high and on some volume.

TECHNICAL. Intraday the action was not bad overall if you could get through that choppy start to trade. A gap higher then up and down, filling the gap before a steady midday move higher and then a surge higher in the afternoon session. Positive intraday action once more.

INTERNALS. Solid breadth on both NYSE and NASDAQ (3.4:1 NYSE), aided by a 3% surge in the small caps. Small caps have not broken to a higher high but are at the cusp. They are up 9% in the past 5 sessions. Volume jumped to above average on NASDAQ, the best trade on that exchange since the second session of April. Good to see after the low volume rise, but it was just one day in many lower volume days. A positive yes, but not a trendline change. Of course you had NYSE with its below average trade, and though it was rising volume it was still below the Tuesday distribution trade. Some positives, yes, but still not exuding strength.

CHARTS. SP500 cleared the April peak but even with that there is still no new post-November high as it continues below the February interim peak. It has made a new post-March high and March was the low for the index, but that move did not change the overall downtrend. On the other hand NASDAQ mad a significant move as it cleared the January high, and THAT is a new post-November high. Volume was up and above average, another plus. NASDAQ has some momentum, and if earnings allow it, NASDAQ can move on up to the 1750ish and even 1786 at the November peak on this run. Just so happens the 200 day SMA is there as well. SP600, as noted above, matched the early January peak and is on the cusp of an important move but is not there yet. As we always say, until it makes the move a good chart is just a pretty picture.

LEADERSHIP. Techs and chips were obviously the main leaders but retail was strong as well. Steel and copper edged higher but they appear tired near term after some good moves. Leading financials are weary though there is some tremendous option activity in some of the regional banks ahead of their earnings. Perhaps they will provide financial leadership as the big names try to rest in place just as the techs and chips did while the financials led. Financials are needed for the rally to really run; techs, chips and financials have teamed up to produce good runs when moving together. Right now they are a bit out of sync but the indices are still moving higher.

SUMMARY. A good leadership move by techs and chips as they responded to a very good pullback to test the last move higher. Volume was up. Positives as the primary leaders in the rally got back into the action but bigger picture the overall volume remains low. Indeed NYSE volume remained below average on an upside move after a distribution session. Moving higher with the continuing upside bias and momentum and we are riding it higher, but we are also taking some gain on positions even as we enter some new ones because we know these low volume moves don't last forever. We also know, however, that they can continue higher much longer than any rational person believes they should, and thus we stay in the game.