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主题：03/17/2009 Market View -- 宁子
家园 03/17/2009 Market View SUMMARY:
- Market refuses to test further as techs lead a renewed rally.
- Great price gains but volume fails to deliver a follow through.
- Housing starts surge on condo building
- LIBOR continues its thaw, corporate debt market has buyers.
- Indices resume the rally toward key resistance, setting up a battle for a follow through session.
Stocks bounce right back from Tuesday, but cannot deliver a follow through.
Futures were flattish heading into the open after popping up on a 22% jump in housing starts. Sounds great, but condos were the reason. Maybe that is good; home is where you hang your heart at or something like that. PPI was reasonable though the core ticked higher more than anticipated (0.2% versus 0.1%). Analysts downgraded to MS and GS.
A lot of noise that didn't have a lot of impact. Stocks started soft but almost immediately started to move higher. GS and MS paused early but then rallied. Yeah analysts. Overall stocks started steady stair-step advances on the day. There was an attempt to sell stocks to start the afternoon session that moved to mid-afternoon, but that was shaken off and the indices sprinted into the close.
The key for the session: the recent leaders that had a tougher Monday jumped right back up Tuesday. Chips, broker/dealers, technology all bounced nicely. They started higher and but for that afternoon dip, they did not come back as the buyers used that to move in. Impressive recovery from Monday's setup, but unfortunately it could not provide a follow through to show the buyers really taking over. That was the disappointment, and when we saw the volume was coming in a bit light we thought it was a great time to lock in some gain and we banked some solid upside in the event the market cannot provide the follow through.
TECHNICAL. Intraday the action reverted to that more bullish high to low characteristic of solid rallies. A soft start, a rebound that carried into the afternoon. Then the afternoon dip as the sellers tried to move in, but buyers used it to enter and drove stocks to close at the highs. Nice action but unfortunately not enough buyers moved in late to drive volume higher as well.
INTERNALS. Very good breadth (3.2:1 NYSE, 2.8:1 NASDAQ) was follow through caliber. The price gains were top notch. Volume, however, lagged, coming in below average on both NYSE and NASDAQ. No follow through, just a further extension of the rally on lower trade. To be of the strongest quality the market needs to show a follow through session Wednesday that hits on all cylinders.
CHARTS. There were no major breaks of next resistance on the session, just a continued move toward key resistance on all the indices. That in itself, however, is something of significant given Monday was a tough day to follow as the NYSE reversed on volume and NASDAQ sported a 2% loss. Be that as it may, there was no volume and thus we are looking for a move up to the resistance we pegged on this rally at 800ish for SP500 and 1500ish for NASDAQ. What happens there depends upon the buyers. If they show up Wednesday and power the indices to that resistance on strong volume then the market hits that resistance with a stronger hand, looking for a test to be sure, but one to give it a breather before taking on that resistance. If no buyers come in, at least in heavy numbers, then the sellers will see this and when the indices hit those points that many are watching they will take a shot. A solid relief bounce to be sure and that released the oversold pressure, and if the buyers are not there then the sellers will take a shot and try to relive the high life once more.
LEADERSHIP. Those that took the day off Monday (and some starting on Friday) started right back up. Chips, techs, retail (e.g. AMZN), China. Financials did not start great but they came around and rallied (remember GS and MS). Not many leaders in financials, but some are working on it. There was a good test by the recent leaders and on Tuesday they came right back up. The market is working on building more leadership. This rally is helping stocks that were getting clobbered and had put the brakes on the selling to start building up the right side of their patterns while some are just happy to have stopped the selling. This up and down action, even if the market fails at this next key resistance, helps build bases. Thus even a failure at resistance is not a failure overall or in the slightly bigger picture.
家园 THE ECONOMY PPI shows decent action but is worrisome.
The numbers themselves were not that terrible. A 0.1% rise overall versus a 0.4% gain and a 0.8% rise in January. The core double expectations, but at 0.2% it was not a huge miss and it was down from January's 0.4%. Gasoline made up 8.7% of the overall gain. Hello? Hydrogen car people? Please hurry up the process because I sure don't want to bay $3.50 to $4/gallon gasoline again this summer.
What is the burr in the saddle is that prices are not dropping as much as they fell in prior recessions, even the most recent. This recession by all accounts is worse than any in decades but prices are not falling at the same rates.
Meaning? Maybe nothing. Maybe a lot. Prices are not falling fast perhaps because there is some inflation pressure still lingering. That makes sense given all of the massive spending during the Bush years and now the insanely large amounts being thrown at everything by the Obama Administration including its cajoling to get the G20 nations to do the same. Worrisome.
LIBOR and now corporate debt looking better.
LIBOR fell to 1.30% on the 3-month and to 0.31% overnight (from 0.33%). The slow but steady drip, drip, drip, continues.
PFE showed that other aspects of the credit market are in better shape as well. It offered $15B in corporate bonds to help fund its Wyeth purchase and it enjoyed great response. Excellent to see this development, i.e. a corporation able to move debt issues.
家园 THE MARKET MARKET SENTIMENT
VIX: 40.8; -2.94
VXN: 40.36; -3.18
VXO: 41.62; -3.09
Put/Call Ratio (CBOE): 0.78; -0.02
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: 26.4%. Down from 29.7% and at the lowest level since December 2008. Well down from 43.0%, the current top of the recovery as the market rallied off the November low. A rise from 25.3% in December and quickly starting to fall once the market encountered the January selling. Bullishness bottomed on this leg lower at 21.3% in November 2008. 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: 47.2%. Bounced back up after slipping last week. this is the peak for the run this year but is still below the December and October peaks. Hit the 34's on the lows, falling from 38.5% and 46.2% in mid-December. Still above the 35% level considered bullish for stocks, but as with bulls, still well below the level considered bearish for stocks. Bearishness hit a 5 year high at 54.4% the last week of October. 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. As with the bulls the jump in bears did its job after hitting 44.7% in the third week of March. 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). This is a huge turn, unlike any seen in recent history.
NASDAQ
Stats: +58.09 points (+4.14%) to close at 1462.11
Volume: 2.105B (-1.69%). The hole in the session from a follow through standpoint.
Up Volume: 1.93B (+1.327B)
Down Volume: 159.283M (-1.381B)
A/D and Hi/Lo: Advancers led 2.83 to 1
Previous Session: Decliners led 1.23 to 1
New Highs: 5 (-3)
New Lows: 53 (+16)
NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg
NASDAQ rallied up to the 50 day EMA on the close, putting it inside the January consolidation. That leaves it below some resistance at 1506 from a series of interim highs and lows. NASDAQ cleared the 50 day EMA early January and again in early February, but gave it up after a couple of sessions. NASDAQ has put in a solid move off the lows and Tuesday was impressive given the Monday 2% decline. Volume has tailed off the past three sessions; not so bad on the prior two given they were something of pullbacks. Given Tuesday was solidly upside price-wise the volume was disappointing. We will see if NASDAQ can carry on through to 1500ish level AND if the buyers can give it a follow through. If not then we look for a pullback and have to see how strong. A move to the 1387ish level would be a logical test if it was going to hold up and continue a run higher after a follow through-less move up to 1500.
SOX (+4.13%). After a 3.6% loss Monday SOX tapped the 50 day EMA intraday and bounced right back up, gaining 4% Tuesday. That keeps it basically in a lateral move for three sessions and is working on a handle to its 6 week double bottom base. It is still in its 14 week lateral consolidation and forming this pattern within it that could propel it on out. Very interesting but we have to fold into the mix the fact that the other indices are getting extended on this rebound rally and SOX may take longer to set up and make a breakout.
NASDAQ 100 CHART: http://investmenthouse.com/ihmedia/NASDAQ100.jpeg
SOX CHART: http://investmenthouse.com/ihmedia/SOX.jpeg
SP500/NYSE
Stats: +24.23 points (+3.21%) to close at 778.12
NYSE Volume: 1.492B (-21.4%). As with NASDAQ, not the volume you want to see.
Up Volume: 1.352B (+264.87M)
Down Volume: 133.647M (-667.661M)
A/D and Hi/Lo: Advancers led 3.24 to 1
Previous Session: Advancers led 1.38 to 1
New Highs: 9 (+2)
New Lows: 65 (-1)
SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg
Broke through the September 2008/February 2009 down trendline on the close, but the lack of volume gives it little credibility. The 50 day EMA (794.23) is immediately overhead and then the January low at 805. Those are key levels for the SP500 and when it hits there it will be extended on this run and a test back to the November low would be logical if it is going to hold.
SP600 (+3.97%) is looking healthier, but of course it was on its deathbed so the fact that is has some color in the cheeks is nice but hardly reason to go out and get the house ready for the homecoming. After two days laterally it finally broke up through the November closing low as well as the bottom of the late February range. Nice to see it happen and that gives it some breathing room to 225 (December low), about 12 points from where it closed Tuesday. Some life, but a long way to go.
DJ30
Looked to be in trouble Monday with its high volume reversal and doji but then tapped the 18 day EMA on the Tuesday low and recovered for a gain. A much lower volume gain though unlike NYSE and NASDAQ it was above average (by a hair). Still below the November low (7552 closing) and that is the key move ahead and it has the 50 day EMA (7636) sitting right on top of it.
Stats: +178.73 points (+2.48%) to close at 7395.7
Volume: 391M shares Tuesday versus 587M shares Monday. Substantially lower volume on the rebound as the sellers left but the buyers were not swarming.
DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg
家园 WEDNESDAY CPI, Current Account, oil inventories, and the FOMC rate decision. Pretty busy day, but not too sure anything will really move the market. Prices are holding higher though they are declining. The Fed won't make any difference; we heard it all on '60 Minutes' Sunday. The current account could be of interest given all the talk from China and elsewhere about our spending. Kind of funny and somewhat ironic that a communist country is telling us how to issue our debt, etc. Interesting times indeed.
The Tuesday action was not really expected, particularly after what the NYSE indices showed Monday with those higher volume reversals. We anticipated NASDAQ would show some more consolidating in its own right. Instead a weak start and then a rally all session with solid leaders moving well. Just no volume. With everyone looking at the run maybe it will turn back on Wednesday. Many after hours were talking about this move as extending the rally a bit too far so maybe we have another upside move again.
We are looking for some more push upside but if it comes, unless there is big upside volume and a powerful move, we expect a pullback afterwards. We took gain Tuesday based upon the solid price moves after taking some late last week as well. If there is another surge Wednesday that is not accompanied by big volume then we will be taking some more off the table and watch how the test of the key levels plays out. If it starts downside hard then we look at some of those downside positions that we have adjusted the entry points on as the market continued to rally.
So basically the rally continues but it is reaching the outer bands of potential resistance and that means we have to take care with the upside and be ready for some downside to make some quick money on a test lower after the indices hit that resistance. This could really surprise to the upside; don't want to downplay this as Tuesday was much stronger than anticipated even with the lower volume. It has the potential to surprise and if it does we let some plays continue to run. It will indeed be a surprise if it does, however, because we are still looking for a stall as the indices hit that next resistance.
Support and Resistance
NASDAQ: Closed at 1462.11
Resistance:
1460 is the February low. Reached them but not shattered.
The 50 day EMA at 1459. Shaken but not stirred yet.
The 50 day SMA at 1474
1493 is the October 2008 low & late December 2008 consolidation low.
The 90 day SMA at 14.96
1521 is the late 2002 peak following the bounce off the bear market low
1536 is the late November 2008 peak
1542 is the early October 2008 low
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
Support:
1434 is the January low (1440.86 closing)
1428 is the mid-November 2008 low
The 18 day EMA at 1400
1398 is the early December 2008 low
1387 is the 2001 low
1316 is the November 2008 closing low
1295 is the November 2008 low
1271 from is the March 2003 low, 1253 intraday
1262 from July 2002
1192 is the July 2002 intraday low
1114 is the October 2002 low, the bear market low
S&P 500: Closed at 778.12
Resistance:
The 50 day EMA at 795
800 is the March 2003 post bottom low
805 is the low on the January 2009 selloff. KEY Level
812 is the February low
815 is the early December 2008 low
818 is the early November 2008 low
The 90 day SMA at 837
839 is the early October 2008 low
848 is the October 2008 closing low
853 is the July 2002 low
857 is the December consolidation low
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:
768 is the 2002 bear market low
752 is the November 2008 closing low but it is not broken and done away with
The 18 day EMA at 746
741 is the November 2008 intraday low
722 is a December 1996 low
681 is the June 1996 intraday peak, 673-71 closing
665 from August 1996
656-654 from January, April 1996
607-05 from November 1995
Dow: Closed at 7395.70
Resistance:
7449 is the November 2008 low
7524 is the March 2002 low to test the move off the October 2002 low
7552 is the November closing low. KEY Level.
The 50 day EMA at 7636
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.
The 90 day SMA at 8121
8141 is the early December low
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
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:
7282 is the October 2002 closing low in the prior bear market.
7197 is the intraday low from October 2002 bear market
7115 is the February 2009 closing low
The 18 day EMA at 7156
7008 from February 1997 closing peak
6528 is the November 1996 peak
6489 from December 1996 closing peak
6356 is the April 1997 intraday low
Economic Calendar
These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.
March 16 - Monday
March Empire Manufacturing (8:30): -38.23 actual versusl -32.0 expected, -34.65 prior
Net Long-Term TIC Flows, January (9:00): -43B actual versus $34.8B prior
Capacity Utilization, February (9:15): 70.9% actual versus 71.1% expected, 71.9% prior (revised from 72.0%)
Industrial Production, February (9:15): -1.4% actual versus -1.2% expected, -1.9% prior, revised from -1.8%
March 17 - Tuesday
February Building Permits (8:30): 547K actual versus 500K expected, 531K prior
Housing Starts, February (8:30): 583K actual versus 450K expected, 477K prior
Core PPI, February (8:30): 0.2% actual versus 0.1% expected, 0.4% prior
PPI, February (8:30): 0.1% actual versus 0.4% expected, 0.8% prior
March 18 - Wednesday
February Core CPI (8:30): 0.1% expected, 0.2% prior
CPI, February (8:30): 0.3% expected, 0.3% prior
Current Account Balance, Q4 (8:30): -$136.7B expected, NA prior
Crude Oil Inventories, 03/13 (10:30): +749K prior
FOMC Rate Decision (14:15): No change expected
March 19 - Thursday
03/14 Initial Jobless Claims (8:30): 654K prior
Leading Indicators, February (10:00): -0.6% expected, 0.4% prior
Philadelphia Fed, March (10:00): -40.0 expected, -41.3 prior
家园 THE PLAYS: Upside: If the next move upside is powerful and shows a follow through there are stocks in position to run higher still.
Play Date: 03/17/2009
HOTT (Hot Topic--$9.47; +0.42; optionable): Teen apparel stores
http://biz.yahoo.com/p/h/hott.html
After Hours: $9.25
EARNINGS: 05/20/2009
STATUS: Reverse head and shoulders. HOTT has hung in through all of the selling, forming up a 6 week base, setting the stage for a breakout move. Formed a 5 week cup base and tried the breakout in early February, but the market sold and HOTT came back to form this base. Nice action and looking for volume to surge as HOTT makes the breakout move.
Volume: 1.168M Avg Volume: 1.028M
BUY POINT: $9.66 Volume=1.4M Target=$11.74 Stop=$8.98
POSITION: UHO EU - May $7.50c (76 delta) &/or Stock
http://www.investmenthouse.com/cd/hott.html
Play Date: 03/17/2009
ILMN (Illumina--$36.07; +1.52; optionable): Biotechnology
http://biz.yahoo.com/p/i/ilmn.html
After Hours: $36.07
EARNINGS: 02/03/2009
STATUS: Cup with handle. An interesting 6 week reverse head and shoulders has formed that used the 50 day EMA at 30 as support and bounced ILMN higher late last week. The move sent it over the 200 day SMA (34.26) that stalled it in mid-February, and Friday to Monday ILMN was testing that break before a modest bounce Tuesday. Bigger picture this short base is the handle consolidation to a larger 6 month base that is setting the foundation for a nice breakout ahead. Money flow is moving up ahead of price as it consolidates. One of the first cup with handle bases of size we are seeing in this recovery. Cool.
Volume: 2.174M Avg Volume: 2.295M
BUY POINT: $36.51 Volume=2.5M Target=$42.45 Stop=$33.95
POSITION: IQA FG - June $35c (62 delta) &/or Stock
http://www.investmenthouse.com/ci/ilmn.html
Play Date: 03/17/2009
MTZ (Mastec--$11.65; +0.80; optionable): Construction
http://biz.yahoo.com/p/m/mtz.html
After Hours: $11.46
EARNINGS: 03/02/2009
STATUS: Cup w/handle. Good volume Tuesday as MTZ moved to the top of its weeklong lateral move, the handle to its 11 week base. After bottoming in November, MTZ rallied and then formed this base during the market selling. Strong money flow is surging ahead of price and looking for MTZ to make the breakout and follow that money higher.
Volume: 844.096K Avg Volume: 801.464K
BUY POINT: $11.77 Volume=1.2M Target=$14.44 Stop=$10.95
POSITION: MTZ GB - July $10c (65 delta) &/or Stock
http://www.investmenthouse.com/cd/mtz.html
Play Date: 03/17/2009
NETL (Netlogic Microsystems--$27.07; +1.60; optionable): Semiconductors
http://biz.yahoo.com/p/n/netl.html
After Hours: $26.68
EARNINGS: 02/03/2009
STATUS: Cup w/handle. Working on a three week handle to its 6 month base, bumping the 200 day SMA (26.83) on the handle highs as NETL measures for the breakout move over this key resistance. One of the few to form this pattern and this size as the market recovers from the sharp selloff. In a very good risk/reward position and ready to move in as NETL breaks higher on strong trade.
Volume: 608.281K Avg Volume: 798.662K
BUY POINT: $27.57 Volume=1.2M Target=$32.35 Stop=$25.64
POSITION: LKT GE - July $25c (68 delta) &/or Stock
http://www.investmenthouse.com/cd/netl.html
Continuing play ready to move:
Play Date: 03/11/2009
MCHP (Microchip--$20.51; +0.50; optionable): Semiconductors
http://biz.yahoo.com/p/m/mchp.html
After Hours: $20.51
EARNINGS: 01/29/2009
STATUS: Cup w/handle. Moved up the buy point to account for the break higher and subsequent lateral move to form the handle. Looking solid and just being patient to let MCHP show us the breakout to buy into. To recap: A very interesting pattern. MCHP is in a 4 month trading range, but over the past 6 weeks has formed a cup with handle pattern. It made a higher low in March at the bottom of the new base, then rallied up to the resistance at 20.70 last week. It has since shuffled sideways on very low, below average volume. Nice handle forming as money flow surges higher. Looking for the breakout over the top of the range on some strong volume to give us the buy point.
Volume: 4.027M Avg Volume: 4.722M
BUY POINT: $20.82 Volume=5M Target=$24.77 Stop=$19.77
POSITION: QMT DW - Apr. $17.50c (79 delta) or QMT GD - July $20c (56 delta) &/or Stock
http://www.investmenthouse.com/cd/mchp.html
Downside: In addition to SDS, IWM, OCR, GME
Play Date: 03/17/2009
ICUI (ICU Medical--$29.86; +0.21; optionable): Medical instruments
http://biz.yahoo.com/p/i/icui.html
After Hours: $29.44
EARNINGS: 02/02/2009
STATUS: Downside. ICUI fell like a stone in late February through early march. It fell to the November low and then rebounded the past week to the 200 day SMA (29.87) it crashed through to start the month. Showed some churn just below this level Monday as volume spiked, then closed right at the resistance on low Tuesday volume. Just watching to see if ICUI has to go back to the ICU and gives us a buy point as it does so. A move to the target lands a 40%ish gain.
Volume: 114.386K Avg Volume: 151.169K
BUY POINT: $29.21 Volume=185K Target=$26.72 Stop=$29.98
POSITION: QPD QF - May $30p (-45 delta)
http://www.investmenthouse.com/ci/icui.html