主题：04/22/2009 Market View -- 宁子

MARKET SENTIMENT

VIX: 38.1; +0.96

VXN: 39.24; +0.8

VXO: 38.82; +1.43

Put/Call Ratio (CBOE): 0.78; -0.06

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: +2.27 points (+0.14%) to close at 1646.12

Volume: 2.583B (+7.89%). Good jump in volume and it may turn out to be positive as a lot of downside occurred late as positions were squared ahead of AAPL earnings. Again, how the earnings announcers are treated will tell this story.

Up Volume: 1.562B (-360.958M)

Down Volume: 1.077B (+586.637M)

A/D and Hi/Lo: Advancers led 1.1 to 1

Previous Session: Advancers led 2.9 to 1

New Highs: 0 (-9)

New Lows: 0 (-15)

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

Gapped lower and surged higher, matching last week's high at the January peak. It fell back to flat and remains in the range from 1600 to 1680ish. Is the failure to make the break bad? Not if NASDAQ continues moving laterally and builds a nice flat consolidation in this range and makes a new breakout. Again, may sound like a broken record, but how the earnings are treated and its response to them will tell the tale.

SOX (+4.33%) was back in the saddle Wednesday, surging off the test back to the February peak all the way to the 200 day SMA and a yet another new bear market high. It got there and could not hold it. It peeled off and closed at the early April peak. With that lower low the past week and the fall from the 200 day we closed the rest of the SMH play. Not dead, can still consolidate, and there are still some chips in great position to rally. It has a nice cushion to consolidate from the 200 day to the January peak. No problem with that.

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

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

SP500/NYSE

Stats: -6.53 points (-0.77%) to close at 843.55

NYSE Volume: 1.771B (+5.93%). Rising, just above average trade, but similar to NASDAQ with the surge and then giving it up. Not great price/volume action.

Up Volume: 745.426M (-705.14M)

Down Volume: 1.011B (+801.704M)

A/D and Hi/Lo: Advancers led 1.18 to 1

Previous Session: Advancers led 3.34 to 1

New Highs: 13 (+4)

New Lows: 60 (+15)

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

Rallied further past 850 but never came close to next resistance at 875 before it turned back down and closed BELOW 850. Don't want to make too much of that but point out that SP500 has made a lower low similar to SP500 and is threatening a lower high here. It can still just wander laterally and consolidate, setting up a new run higher. Nothing definitive yet but there is a character change that it is working through and we are ready for either the upside or downside.

SP600 (+0.62%) took something of a breather after some breakneck up and down sessions. It hig a new high on this run and then peeled back. SP600 looks good compared to most other indices, and that is a positive for the continued rally move even if it slides into a lateral consolidation even more than now.

DJ30

Bounced down from 8000 this week and is right in the middle of the 7500 to 8000 range. Low volume. The blue chips are ahead of most in consolidating as they were laggards in moving up. Hey, leadership rotates. We will see if the Dow is an early mover out of the lateral consolidation.

Stats: -82.99 points (-1.04%) to close at 7886.57

Volume: 387M shares Wednesday versus 424M shares Tuesday.

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