主题：04/20/2009 Market View -- 宁子

The run to safety Monday, i.e. the moves into US Treasuries, the US dollar, and into gold, once again arose as the worries about a global economic recovery materialized. Why Monday? Why Monday when last week China's growth rate showed the lowest since the Boxer Rebellion? Why Monday when the prior three weeks the economic news out of the EU was on the lines of Europe in the immediate aftermath of WWII?

Okay I am embellishing a bit but the point is that the data about the troubles in the rest of the world has been very apparent but the market rallied anyway. It was only when the largest US banks were truly threatened with nationalization that the woes of the rest of the world became enough to supposedly cause the spin lower. The reason: if the US goes to centrally planned economies as in Europe we won't be the engine that drives the rest of the world, or more accurately, funds Europe's ability to take an entire month or two off from business each year and virtually shut down the countries as far as business. That doesn't even cover funding their low cost drugs with our research and higher prices here so they can mandate low prices in their countries. Said it before but we keep hearing it from our friends in Europe: 'what the hell is going on over there?'

The after hours earnings from IBM and TXN were better than expected and helped raise some optimism about Tuesday, somewhat blunting the Monday selloff. They both topped expectations, beating earnings and revenues, and both had more favorable out looks with TXN raising its midpoint expectations sharply and IBM noting its improved comfort level with its 2009 guidance. These stocks were up after hours and overall there was a positive response, but it of course was not taking back the lion's share of the Monday losses.

The earnings could be enough to blunt further selling and deflect it into more of that consolidation or sideways move discussed above that would allow the indices to hold the line and again set up for a move higher.

We have to see how this plays out. The selling was sharp. SP500 hit some serious resistance after a good run higher and at a minimum it needs to consolidate a bit. Volumes mercifully didn't surge, but they were not light trade sessions. When you have 4% to 5% declines in a session that requires some attention and typically does not work itself out in just a day or two. The indices were up 20+% and on light trade the last half of the move. They made some key moves but the light volume undermined the gains. Now the market has to sort out whether it is serious about an economic recovery from here.

This could mean at a minimum some sideways chop that makes little headway, but that also is good consolidation action for the market. In the initial drop, however, we can look at some downside plays on stocks that have rallied nicely, are breaking the near trendline, and have some room to fall. We issued a bonus alert on AA to the downside at the close Monday after we spotted its break and the good option pricing and potential decline. It is still a buy on Tuesday if it does not gap lower. Indeed if the IBM and TXN indices bounce some stocks higher early that could give us good downside entry points on these quicker plays of the trendline breaks.

We closed some positions that broke their trendlines to preserve gain and we let others that were holding support hold over to see if they get a pop off the support. If they do but cannot gather strength, i.e. volume is low and they bounce toward resistance but stall, we can use the bounce and close them out. If things reverse to the upside, cool. We let them. We just don't anticipate that happening after the move to this point and the lower trade on the latter part of the move. We protect current positions that struggle to hold support and at the same time look for good pullbacks for the future upside bounces while we also play some downside that presents itself for some easy and rather quick gains.

Support and Resistance

NASDAQ: Closed at 1608.21

Resistance:

1620 from the early 2001 low

1623 is the early April peak

1644 from August 2003

The January closing peak at 1653 (intraday)

1661 is the April 2009 prior peak

1666 is the intraday January 2009 peak

1780 is the November 2008 peak

The 200 day SMA at 1785

1947 is the October gap down point

Support:

1603 is the December peak

1598 is the February 2009 peak, the last peak NASDAQ made

1587 is the March 2009 high is getting put to bed again

1569 is the late January 2009 peak

1542 is the early October 2008 low

The 50 day EMA at 1537

1536 is the late November 2008 peak

1521 is the late 2002 peak following the bounce off the bear market low

1505 is the late October 2008 closing low.

1493 is the October 2008 low & late December 2008 consolidation low

S&P 500: Closed at 832.39

Resistance:

839 is the early October 2008 low

842 is the early April peak

846 is the April peak

848 is the October 2008 closing low

853 is the July 2002 low

857 is the December consolidation low; cracking but not broken

866 is the second October 2008 low

878 is the late January 2009 peak

889 is an interim 2002 peak

896 is the late November 2008 peak

899 is the early October closing low

919 is the early December peak

944 is the January 2009 high

Support:

833 is the March 2009 peak

The 90 day SMA at 826

818 is the early November 2008 low

The 50 day EMA at 816

815 is the early December 2008 low

805 is the low on the January 2009 selloff. KEY Level

800 is the March 2003 post bottom low

768 is the 2002 bear market low

752 is the November 2008 closing low but it is not broken and done away with

741 is the November 2008 intraday low

Dow: Closed at 7841.73

Resistance:

7867 is the early February low

7882 is the early October 2008 intraday low. Key level to watch.

7909 is the early January low

7932 is the March 2009 peak

7965 is the mid-November 2008 interim intraday low.

The early April peak at 8076

The April peak at 8113

8141 is the early December low

8175 is the October 2008 closing low. Key level to watch.

8197 was the second October 2008 low

8375 is the late January 2009 interim peak

8419 is the late December closing low in that consolidation

8451 is the early October closing low

8521 is an interim high in March 2003 after the March 2003 low

8626 from December 2002

8829 is the late November 2008 peak

8934 is the December closing high

8985 is the closing low in the mid-2003 consolidation

9088 is the January 2009 peak

Support:

The 50 day EMA at 7771

7702 is the July 2002 low

7694 is the February intraday low

7552 is the November closing low. KEY Level.

Economic Calendar

These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.

April 20 - Monday

March Leading Economic Indicators (10:00): -0.3% actual versus -0.2% expected, -0.2% prior (revised from -0.4%)

April 22 - Wednesday

04/17 Crude Oil Inventories (10:35): +5.670M prior

April 23 - Thursday

04/18 Initial Jobless Claims (8:30): 630K expected, 610K prior

Existing Home Sales, March (10:00): 4.65M expected, 4.72M

April 24 - Friday

March Durable Orders (8:30): -1.5% expected, 5.1% prior

Durable Orders, Ex-Auto, March (8:30): -1.2% expected, 3.9% prior

New Home Sales, March (10:00): 340K expected, 337K prior