主题：04/22/2009 Market View -- 宁子

SUMMARY:

- Another soft start is bought, but ahead of key earnings market closes flat.

- Geithner breaks form, provides a bit of a boost with further comments about stress tests, TARP repayment.

- Earnings still rewarded as after hours trade shows. Enough to start a new leg through resistance or just hold the current lateral move?

- Thursday key: how the after hours rallies on earnings hold.

Volatility ahead of key earnings.

The reality of earnings present and earnings to come were the driving forces at work Wednesday. Apologies to Dickens, but earnings are what matters right now though the day to day specter of government interference is a constant concern.

At the open stocks were weak on the MS earnings miss. After a string of solid financial results that some say are real, others say fiction, MS made no pretense things were fine as it missed big. A second consecutive weak start, this one looking weaker than Tuesday. Nonetheless, once again stocks rebounded on the heels of a lower open. Despite MS' earnings financials rebounded, getting a boost, from all places, from Treasury Secretary Geithner.

Used to be when Geithner talked the markets listened, and tanked. Today Geithner elucidated his thoughts from Tuesday's House hearing and TARP repayment. Geithner would "welcome stronger banks repaying funds" although "supervisors" have to make the judgment as to which banks could do so because the financial system needed to "maintain

Confidence and a deep enough pool of resources" to rectify the banking and credit crisis. He didn't say who those 'supervisors' are, but that didn't seem to matter as he went on to say he anticipates a "substantial amount of resources will come back." That was enough to fuel a recovery from that opening slump, but in the end it was not enough to win out the day.

With AAPL (the clear market leader) announcing earnings after hours there was anticipation of strong results. Apple was an early leader Tuesday, and it along with a recovery in financials pushed the market nicely higher. Indeed NASDAQ rallied 36 points, led by of course, AAPL. Then a 5 hour trading range into the last half hour. Then anticipation turned to cold feet. NASDAQ lost 33 points from the high. A lot of running to end up flat, pretty much what the market has done of late as it trades laterally in its range.

TECHNICAL. Intraday was a smorgasbord. Low start then a strong upside surge, then back to flat. The action shows the indecision the market has shown of late and ahead of a few key earnings reports, particularly after MS cast doubt on the veracity of the financial earnings that had handily topped expectations. A bit of a credibility gap was developing.

INTERNALS. Breadth matched the session, all over the map then closing flat. Volume was more interesting with both NYSE and NASDAQ trade rising and putting in solid above average sessions. The late selloff took the bloom off the rose and thus the day was more of a churn, i.e. high volume turnover or running in place. That is very much in line with the overall market action of late, i.e. the fade from a good run at resistance and the sideways movement since. In other words, a bit of indecision, but if indecision only leads to sideways action, that isn't bad.

CHARTS. SP500 rallied through 850 resistance, NASDAQ move through the January peak again, and SOX recovered from the Monday drubbing, rallying through the 200 day SMA. Then they all reversed and gave up those levels on the pre-AAPL cold feet. That continues the overall indecision of the indices after the last run that took them through resistance only to give it back. There is a character change ongoing from the move straight up; the volatility the past week shows there is a fight starting back up between sellers and buyers. They are, however, holding nicely, stretching out a lateral consolidation range. Given the move to this point, the ability to hold gains and put in a lateral consolidation is impressive. Now we see if AAPL and company can bring about a new breakout attempt or keep the lateral consolidation working.

LEADERSHIP. After a short respite the chips looked good . . . and not so good. Some really great looking patterns but also enough of a late fade to get us to take the rest of the SMH gain off the table. Big techs were up again, quite a few are extended. They moved up ahead of Apple earnings then they moved back down ahead of AAPL earnings. Retail remained solid along with eateries even if MCD sold on its earnings. The common theme, however, is that many of the early leaders are extended or are working on bases. There are some good looking upside patterns that can fill a void, but they will likely need most of the market to hold up if they are going to make strong moves. If the overall market keeps this lateral move going new leaders can breakout and rally nicely. If the after hours earnings control even these extended stocks can take off on a new run, and they would help out stocks such as VSEA trying to make a new breakout.