主题：04/16/2009 Market View -- 宁子

MARKET SENTIMENT

VIX: 35.79; -0.38

VXN: 36.8; -1.51

VXO: 36.86; -1.11

Put/Call Ratio (CBOE): 0.75; -0.18

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: 43.2%. The market rally has revved up the bulls, jumping up from 36.0% the prior week. The sharp jump in the bulls continues. Back over the 35% range considered bullish, but as noted this is not a bearish indication yet. Has to get up to the 60% to 65% level to be bearish. Dramatic rise from 21.3% in November 2008, the bottom on this leg. 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: 34.1%. Continuing their decline, falling from 37.1% the prior week. Well off the high on this run at 47.2%. Hit the 34's on the lows, falling from 38.5% and 46.2% in mid-December. Just slipped below 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. 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). That was a huge turn, unlike any seen in recent history.

NASDAQ

Stats: +43.64 points (+2.68%) to close at 1670.44

Volume: 2.277B (+14.71%)

Up Volume: 2.023B (+1.127B)

Down Volume: 333.991M (-809.291M)

A/D and Hi/Lo: Advancers led 2.6 to 1

Previous Session: Advancers led 1.7 to 1

New Highs: 22 (+15)

New Lows: 9 (-5)

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

NASDAQ hits a new post November high and on rising, above average volume. Not bad action at all as the techs cement their position as main leaders on this run higher. It is hard to argue with the technical action and this higher high is a key move in the recovery. It will of course be tested but it is doing what needs to be done, i.e. taking out the resistance points one at a time. It ran into the January high and faded to test, then jumped back through it; that is how you win back the upside.

NASDAQ 100 (2.77%) bounced off its test of the prior highs as it moves on toward its November high. A move up to 1375 toward the 200 day SMA just over 1400 is a logical resistance point for this run.

SOX (+3.36%) also showed why it is a major leader on this run with a strong rebound and new post selloff high. It is coming up to the 200 day SMA, just over 4 points away, or half the Thursday move. Expecting a bit of resistance there but SOX could also run to 275 price resistance, and that is another 20 points.

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

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

SP500/NYSE

Stats: +13.24 points (+1.55%) to close at 865.3

NYSE Volume: 1.604B (+8.4%)

Up Volume: 1.252B (+183.065M)

Down Volume: 329.841M (-71.308M)

A/D and Hi/Lo: Advancers led 3.44 to 1

Previous Session: Advancers led 2.32 to 1

New Highs: 16 (+8)

New Lows: 69 (+25)

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

SP500 made a new April high and took out the October closing low, but it is still below the late January and February peaks. No higher high for SP500 yet. The financials are not responding that well to earnings, and if that does not change with some help from the regionals those two nearby peaks at 875ish could put the kibosh on this move before it makes it to 900ish.

SP600 (+3.03%) is on a rampage, up 9% in five sessions, clearing the November/January down trendline with some panache as it closed right at the late January high; spot on it. An interesting reverse head and shoulders pattern and breaking through the neckline but on the relatively low NYSE volume. Trying to assume some leadership.

DJ30

The blue chips were up but did not get the kick in the pants from JPM it needed. No volume and bumping spot on the October closing low on the Thursday close. A new high on this move off the March low but as you know, no higher high yet. If the big financials move again it can make a run at the late January peak (8406), and that would finally give it a higher high.

Stats: +95.81 points (+1.19%) to close at 8125.43

Volume: 359M shares Thursday versus 413M shares Wednesday. Lower, well below average volume on the move and that does not inspire much confidence.

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