主题：02/24/2009 Market View -- 宁子
家园 02/24/2009 Market View SUMMARY:
- Bernanke does it right, provides the trigger for the rebound.
- Consumer lack of confidence hits a record.
- Thank goodness Congress is going to fix housing.
- Will the market now attribute the government with some ability to solve the financial morass or is it just your normal bounce after tough selling?
Market gets its trigger, posts a strong rebound move.
SP500 was right at the November low and most were looking for more downside. Still seems rather inevitable as NASDAQ could easily test its bear market lows, but Tuesday was not the day.
Earnings surprises in retail from retailers Macy's, JWN, and even Home Depot (though the latter lowered its 2009 forecast) helped gin up a bit of excitement. The Case/Shiller housing price index hit a new low yet again, falling 18% in Q4, but that was old news and actually good news. The futures were a higher and managed to hold on into the open. Consumer confidence was not something to get excited about as it too hit a record low at 25. Twenty-five. A recession is indicated in the 50's. This is a 'send lawyers guns and money' level.
Confidence hurt investor confidence and the indices gave up the move but not the green. Then Bernanke started to talk. His text was already out but it was more of the same. When Bernanke spoke, however, the words took on meaning beyond the text. He was calm, confident, and spoke with the staid authority of an expert truly understanding the situation and knowing what needed to be done. He said the Fed will use all available tools to break the cycle of credit fear. He predicted the economy could leave the recession behind in 2009 and start growing in 2010 if the right actions were taken. The right actions involve heavy intervention with monetary policy and bolstering programs such as TALF that actually broke the logjam with the credit markets after TARP was a failure when its focus was changed to financing banks with cash versus buying the bad assets.
The reaction wasn't immediate. There were many questions and answers, and for once the questions were actually germane and constructive. Bernanke fielded them as easily as Brooks Robinson snatched a candy hop grounder. Mr. B showed he has grown into the job. Nothing like getting tossed in the furnace by your predecessor to temper your steel. He even threw one back at Alan Greenspan, saying nationalization and other federal takeover of banks was not the way to do the job.
While the testimony was only something a Fed-head could love, it did the trick. The markets were calmed. The early bounce was no rally. I knew rallies in the past, and the morning bounce was no rally. Once Bernanke fielded the last question and threw to first for the final out the market took off straight up. It finally got its oversold trigger.
It rallied from early afternoon to the close with hardly a stop. Volume swelled, breadth was a strong upside as it was downside Monday, and SP500 jumped off its November low without violating it. Financials surged with MS and GS, two primary financial leaders, putting in excellent moves. Not bad.
TECHNICAL. Intraday the market started higher, fought off some selling, then bolted upside. Good action on a reversal bounce. No equivocating at the close either. A strong surge is what was needed and what was delivered off the November lows.
INTERNALS. NYSE breadth was a strong upside as Monday's downside. Those lower new lows on the test were indeed instructive. Volume jumped sharply on both NYSE and NASDAQ. Very solid action and it tends to suggest the buying was something more than just short covering. Oh sure there was a lot of short covering; after two weeks of downside and lots of short interest and put option open interest, but strong breadth and higher volume show more than just a narrow bounce. Now whether it is sustainable remains to be seen. It was the first attempt upside in a two week tail kicking. The indices have to maintain the momentum, make it up to near resistance, and then do something about that resistance. That is where a follow through comes in. After this first surge and rally you look for a bit of a test and then a renewed surge 4 to 7 or so days into the rally. That shows the buyers are stepping back in and ready to drive prices higher one more. That tends to show the sellers have run out of gas and don't want to come back in. We will see. The market is still a long way from that issue.
LEADERSHIP. There were some very good stocks making some very good moves. GS and MS mentioned above along with Chinese stocks. Lots of stocks moved higher as the breadth indicates, but the problem was that the prior two weeks of selling, particularly the last part of the selling, wrecked a lot of patterns. Thus many were just playing catch up Tuesday versus making the breaks out of pretty nice patterns. Some recent leaders such as metals and chips were up, but they are damaged goods at this point and their rebounds look just like that: rebounds after breaking down. The market had a plethora of leaders up until the past week. Now they will have to redevelop anew to help propel the market higher. Can be done, i.e. leadership patterns completing after a follow through while the initial leaders streak higher, but the market made it harder for itself with the last bout of selling ahead of the Tuesday bounce.
家园 THE ECONOMY Now that's bad confidence.
Never seen a twenty-five. Couldn't have seen it. That is the lowest since the index was first compiled in 1967. 35 was expected, 37.4 was the prior in January.
All of these are recession levels. The fifties are recession levels. These are down in the bomb shelter waiting for the radiation to wear off numbers. Those finding jobs tough to find rose to 47.8%, the highest since 1992. The 6-month outlook fell to 27.5 from 42.5 in January. Another 'lowest ever' reading and it shows consumers have no confidence all of this government spending and hot air is going to do anything to right the ship.
At these levels confidence means something though it is so low that what we will likely see is that buying and other consumer activity picks up before the confidence numbers get anywhere near levels that would suggest the consumer is recovering. Typically confidence has little to do with reality. When it hits into the fifties, however, that typically coincides with a recession. Been there, done that. Now we see how the consumer recovers, and importantly, how consumer stocks recover ahead of them as the stocks will be the first to move. Thus the move higher in some retail stocks Tuesday was interesting but hard to really believe. Nonetheless you cannot ignore strong moves out of some fairly decent patterns.
Congress is here and ready to save the housing market.
On one of the financial stations pre-market there was the usual discussion about having to find a floor in the housing market before prices would recover and the market recover accordingly. The commentators meant that prices would have to fall low enough for all of the weak holders to get cleared out and for new buyers would step in at the bargain prices. And that, of course, would take some good credit markets to support the lending and other transactions necessary for a healthy market in anything whether it be houses or antique outhouse collections.
There was a New York Congresswoman on the set and she picked up on that discussion, proudly announcing that all of this commentary and worry over finding a floor in the housing market was unnecessary. Why? Because on Thursday Congress is "passing a bill to put a floor in housing." It is the Obama plan to have all of the people who cannot pay their mortgage have it subsidized by those that pay their own. So now we all have to pay our mortgages and someone else's, kind of like having a second home you don't get to use. I am sorry, but the Rick Santelli rant on CNBC is how many, many Americans feel.
They would not be so adamant about it but for the $800B hole in the ground we are pitching money into for stimulus. As one person said today, why not just give everyone in the US the $2,500 or so that is the stimulus? That would come to about $20K per taxpaying household. That would provide some impact. Or how about a 6 month tax holiday? There is impact as well.
No, Congress has the answer, but as noted above, Congress doesn't know the question. The problem is that housing has yet to find its real bottom after an abnormally long, Fed and government-aided boom. The 'cocooning' effect after 9-11 was aided by 1% interest rates that were kept a 1% long after any crisis was over and requirements that lenders lend to those who could never repay. The market has to correct this excess and in some places such as southern California, Las Vegas and Florida, it has made great progress thanks to plunging prices and mortgage rates.
But that is not necessary. Congress is going to pass a bill to bailout those who should have never received loans in the first place. Doesn't matter if they lied on the application or never had the means. Bailout one, bailout all. Well, not all. Again, those that pay the taxes are the bailers. Congress can simply pass a law giving those people money and voila, a floor in the market.
What a great idea. Why has it not been done before? A problem with a sector? Pass a law to provide money and thus fix the problem. Oh, it has been done before. It was done with the war on poverty. Gee, that worked. It was done with public education when the feds got heavily involved in state's matters. Our public schools are in great shape. The feds intervened in housing requiring lending to people who could not repay the loans. That worked well also. Congress can just step in and pass a law. Congress is obviously smarter than the financial markets and can easily regulate them and bend them to Congress' desire by simply passing laws. Brilliant.
It is doing the same with the spending bill. Need some jobs? Buy 3 million with $800B. That is $266K+ per job. Why not just give 3M people the $266K and then tax the crap out of them because then they would be rich? I know a lot of people that would be standing in line for that $266K payment in lieu of a job. While everyone bickered, rightly so, over the inane pieces of garbage we were assigning spending to, no one was putting pen to paper (at least not enough were) and pointing out how absurd this is. Now they are not even claiming to create the jobs but to save the jobs. Okay, save my job with a $266K payment to me. I PROMISE I will spend it on the economy. Pass a law and the markets toe the line. What utter nonsense.
家园 THE MARKET MARKET SENTIMENT
Well maybe that was a pretty good indicator, the old 'throw the hands up' one we saw on Monday. Market bounced right back after that show of exasperation.
VIX: 45.49; -7.13
VXN: 44.05; -6.01
VXO: 45.21; -8.29
Put/Call Ratio (CBOE): 0.79; -0.16. Second session below 1.0 on the close. Spiked higher for four sessions over 1.0 and that did the trick for now.
NASDAQ
Stats: +54.11 points (+3.9%) to close at 1441.83
Volume: 2.377B (+16.17%). Volume jumped right back up, rivaling last week's downside volume.
Up Volume: 2.076B (+1.791B)
Down Volume: 285.387M (-1.457B)
A/D and Hi/Lo: Advancers led 2.59 to 1
Previous Session: Decliners led 3.65 to 1
New Highs: 7 (+3)
New Lows: 302 (-72)
NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg
Gapped back over the December low (1398) and the January closing low by a point. We will see how far it can run now. There is price resistance near 1500 though the 10 and 18 day EMA are before that. NASDAQ was a leader, the holdout to the upside, until just under two weeks back. It gave up that mantle, and it is a tough road back. First things first. Started the move and now we see how much strength it has as the index hits next key resistance.
SOX (+5.10%) recovered its January low as well, moving back into its mid-December to February trading range. Chips were also leaders but they quickly fell on hard times, and the Tuesday rebound did not change that selling.
NASDAQ 100 CHART: http://investmenthouse.com/ihmedia/NASDAQ100.jpeg
SOX CHART: http://investmenthouse.com/ihmedia/SOX.jpeg
SP500/NYSE
Stats: +29.81 points (+4.01%) to close at 773.14
NYSE Volume: 1.842B (+14.21%). Very strong upside volume, the strongest in two months outside of the last Friday expiration.
Up Volume: 1.711B (+1.392B)
Down Volume: 125.762M (-1.147B)
A/D and Hi/Lo: Advancers led 7.68 to 1. Nice strong breadth, not the kind you see in runs that are dominated by short covering.
Previous Session: Decliners led 7.35 to 1
New Highs: 4 (-3)
New Lows: 66 (-416)
SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg
Held the November intraday low (741) and rallied. No official violation of that level though it would not have really mattered if it cracked it a bit. As noted before, support and resistance are somewhat springy, meaning you can run into them and bend them some and then they still hold. You really have to blast through them and leave no doubt you have punched your ticket and are not coming back. A good start but 800 to 804 is major resistance. As noted above, this is a bounce and the character will be measured by how it reacts at resistance.
SP600 (+4.10%) held its November closing low and jumped back up Tuesday. It too has the potential for a double bottom out of all of this, but confirmation of that is a long, long way away. Tuesday was step one in an oversold bounce. A series of advances and tests are needed before SP600 can even get to the point where that will be really defined. Thus you watch to see if there is a follow through move and then a further move higher after that with small caps forming up some better patterns.
DJ30
Bounce off the decline that took the Dow through the 2002 bear market low (7197). That still leaves it well off the November low at 7449. The Dow is in a hole and it has to try and dig its way out. It is a long process.
Stats: +236.16 points (+3.32%) to close at 7350.94
Volume: 468M shares Tuesday versus 355M shares Monday. Some very serious trade as the Dow reversed off its lows.
DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg
家园 WEDNESDAY Obama laid out his agenda for the budget and it outlays massive programs requiring massive spending. He did say that taxes would go up as he is going to let the tax cuts in place expire. Revenues do rise when tax rates initially rise, but then they fall off because incentives to take risk diminish. In the Clinton years marginal rates went up but Clinton also cut capital gains taxes. That helped offset the marginal increases and kept the economy going for a bit more. Ultimately, however, those hundreds of billions in excess tax revenues bled the economy of its lifeblood, investment capital, and when Greenspan choked off the money supply in 2000 that was it.
So we will see how the market responds to this big spending plan and a budget bill with 9,000 earmarks that will go unchallenged by the President that was going to do away with earmarks. The market is pretty good at sniffing out crapola, and we will see pretty quickly what the market smells.
The rally start was strong and it should have a couple more days upside before it is really tested by resistance and shows us just how much starch is in it. Of course if it reverses Wednesday and heads lower, the worst of outcomes for the upside, then SP500 will break its November low and NASDAQ will end up testing its November low.
Right now we ride the rebound up to resistance, take some gain from our new positions, sell some laggards, and then see if there is more upside to come after a test or if the selling resumes with some higher trade. We will take what the market gives either way, knowing it has a long road to the upside and will need new leaders to appear after the initial leaders that looked ready to breakout failed. For now we take it for what it is.
Support and Resistance
NASDAQ: Closed at 1441.83
Resistance:
1460 is the February low
The 10 day EMA at 1466
1493 is the October 2008 low & late December 2008 consolidation low.
1521 is the late 2002 peak following the bounce off the bear market low
The 50 day SMA at 1528
The 50 day EMA at 1531
1536 is the late November 2008 peak
1542 is the early October 2008 low
The 90 day SMA at 1547
1565 is the second low in October 2008
1569 is the late January 2009 peak
1603 is the December peak
1620 from the early 2001 low
1644 from August 2003
1666 is the January 2009 peak
1752 from 2004
1782 from August 2004
1786 is the November 2008 high. Key level.
Support:
1434 is the January low (1440.86 closing)
1428 is the November 2008 low, the bear market low
1398 is the early December 2008 low
1387 is the 2001 low
1295 is the November 2008 low
S&P 500: Closed at 773.14
Resistance:
The 10 day EMA at 791
800 is the March 2003 post bottom low
804 is the low on the January 2009 selloff
The 18 day EMA at 809
812 is the February low
815 is the early December 2008 low
818 is the early November 2008 low
839 is the early October 2008 low
848 is the October 2008 closing low
The 50 day EMA at 849
853 is the July 2002 low
857 is the December consolidation low
866 is the second October 2008 low
The 90 day SMA at 872
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:
768 is the 2002 bear market low
752 is the November 2008 closing low
741 is the November 2008 intraday low
722 is a December 1996 low
673 is a June 1996 peak
Dow: Closed at 7350.94
Resistance:
7449 is the November 2008 low
7524 is the March 2002 low to test the move off the October 2002 low
The 10 day EMA at 7558
7694 is the February intraday low
7702 is the July 2002 low
7867 is the early February low
7882 is the early October 2008 intraday low. Key level to watch.
7909 is the early January low
7965 is the mid-November 2008 interim intraday low.
8141 is the early December low
The 50 day EMA at 8174
8175 is the October 2008 closing low. Key level to watch.
8197 was the second October 2008 low
8419 is the late December closing low in that consolidation
The 90 day SMA at 8448
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
9200 is the July peak in the 2003 consolidation
9323 From June 2003 peak
9575 from September 2003, May 2001
9654 is the November 2008 peak
Support:
7282 is the October 2002 closing low in the prior bear market.
7197 is the intraday low from October 2002 bear market
7008 from February 1997 closing peak
6489 from December 1996 closing peak
Economic Calendar
These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.
February 24 - Tuesday
Case/Schiller Home Price Index, December (9:00): -18.5% actual versus -18.25% expected, -18.20% prior
Consumer confidence, February (10:00): 25.0 actual versus 35.0 expected, 37.7 prior
Bernanke Monetary Policy Report (10:00)
February 25 - Wednesday
Existing home sales, January (10:00): 4.79M expected, 4.74M prior
Crude inventories (10:35): -138K prior
February 26 - Thursday
Durable Goods Orders January (8:30): -2.3% expected, -2.6% prior
Durables ex-Transportation, January (8:30): -2.0% expected, -3.6% prior
Initial jobless claims (8:30): 627K prior
New home sales, January (10:00): 329K expected, 331K prior
February 27 - Friday
Preliminary GDP Q4 (8:30): -5.4% expected, -3.8% prior
GDP Chain deflator, Q4 (8:30): -0.1% expected, -0.1% prior
Chicago PMI, February (9:45): 34.0 expected, 33.3 prior
Michigan sentiment, revised February (10:00): 56.5 expected, 56.2 prior
家园 THE PLAYS Nice break higher with likely two to three upside days before a test of serious resistance.
Upside:
Play Date: 02/24/2009
ASIA (Asiainfo Hldgs--$12.75; +0.61; optionable): Chinese security software
http://biz.yahoo.com/p/a/asia.html
EARNINGS: 2-12-09
STATUS: Cup w/handle. ASIA has worked on its handle the past week, fading back to the 10 day EMA (12.02) near support on lighter trade; very good handle consolidation action in the 10 week base. The pattern over the past 9 months has been volatile at best, but it did make a low in October and has built a series of higher lows, the latest being the current pattern. Friday ASIA gapped lower but held support at 12 as well as above the 200 day SMA (11.53) it broke over on the surge higher just over a week back. May do a bit more testing of the rising 10 day EMA, but money flow is jumping and ASIA bounced nicely last Friday and then again Tuesday after it sold but held the near support Monday. Getting ready to make the break now.
Volume: 332.054K Avg Volume: 384.393K
BUY POINT: $13.08 Volume=500K Target=$15.75 Stop=$12.16
POSITION: EUJ GV - July $12.50c (70 delta) &/or Stock
http://www.investmenthouse.com/ci/asia.html
Play Date: 02/24/2009
BEAT (Cardionet--$26.49; -0.56; optionable): Medical instruments and supplies
http://biz.yahoo.com/p/b/beat.html
EARNINGS: Announced 2-17-09
STATUS: Test breakout. A new issue in March 2008, this is BEAT's first base after surging higher into August. Formed a 4 month reverse head and shoulders and broke higher with its earnings, clearing the 200 day SMA (25.22) as it did. Stalled out the move Friday and has worked laterally the past two sessions; early leader taking a breather. It may come on back to the 200 day, but we want to be ready to move in from here if it takes off to the upside once more. If it comes on back to the 200 day we can lower our buy point and pick up some positions as it comes up off of that support.
Volume: 548.7K Avg Volume: 225K
BUY POINT: $27.12 Volume=375K Target=$31.95 Stop=$25.22
POSITION: QJE EE - May $25c (65 delta) &/or Stock
http://www.investmenthouse.com/ci/beat.html
Play Date: 02/24/2009
CPRT (Copart--$27.21; +0.69; optionable): Auto salvage yards
http://biz.yahoo.com/p/c/cprt.html
EARNINGS: Early March
STATUS: Cup w/handle. You move into recession and people start looking in salvage yards to get parts for their cars. It is not a pretty business, but it makes CPRT money. Right now CPRT has formed an 8 week cup with handle, easing back the past three sessions to near support. The 90 day SMA (27.76) is just overhead and we want to see CPRT crash on through that level on another good jump in volume as seen last week.
Volume: 856.6K Avg Volume: 850K
BUY POINT: $27.88 Volume=1.3M Target=$33.75 Stop=$26.11
POSITION: KQJ EE - May $25c (66 delta) &/or Stock
http://www.investmenthouse.com/cd/cprt.html
Play Date: 02/24/2009
V (Visa, Inc.--$56.35; +2.10; optionable): Consumer credit services
http://biz.yahoo.com/p/v/v.html
EARNINGS: Announced 2-4-09
STATUS: Reverse head and shoulders. Same story, i.e. selling off though V started in June. Bottomed October through December, but was not done. One more dive in January took V to new bear market lows. It recovered, however, and spent the past 2.5 weeks moving laterally on the 10 day EMA (54.87), consolidating the rally off the lows. In so doing V has formed an 11 week reverse head and shoulders though it has flat shoulders. That is okay; shows good accumulation as no one wants to let go of it. Good upside volume the past week as V moved through the June to September down trendline. Looks solid for a break higher out of this pattern and a run toward the 200 day SMA (64.08).
Volume: 10.898M Avg Volume: 7.995M
BUY POINT: $57.11 Volume=10M Target=$64.00 Stop=$53.48
POSITION: V FK - June $55c (55 delta) &/or Stock
http://www.investmenthouse.com/cd/v.html
Continuing plays ready to move:
Play Date: 02/23/2009
AMZN (Amazon.com--$65.60; +3.89; optionable): Internet retail
http://biz.yahoo.com/p/a/amzn.html
EARNINGS: Announced 1-29-09
STATUS: Test breakout. AMZN didn't break lower and is indeed clearing some resistance at the 200 day SMA (65.26) on rising, above average volume, the best in three weeks. Retail is showing some life and AMZN was the first retailer to show life off the bottom. To recap: AMZN formed something of a reverse head and shoulders off the bottom of the selloff. It was fading back when earnings hit and AMZN gapped higher to end January, rallying on up to the 200 day SMA. It has tested back the past two weeks with the market, coming back to near support at the 18 day EMA (60.90) on mostly lower volume. Strong money flow is leading higher and we will see if AMZN holds the lateral consolidation and then makes the break over the 200 day on a good jump in volume. If it does we move in; AMZN has held up very well in the market weakness.
Volume: 10.271M Avg Volume: 9.891M
BUY POINT: On a continuing move (orig. $65.45) Volume=12M Target=$74.95 Stop=$63.11
POSITION: ZQN GO - July $65c (75 delta) &/or Stock
http://www.investmenthouse.com/ci/amzn.html