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主题：04/07/2009 Market View -- 宁子
家园 04/07/2009 Market View SUMMARY:
- Day two of the pullback and all is fairly well.
- Consumer credit dives $7.5B in February. If there is no credit, there is not a lot of credit spending.
- Getting the tests and now we see if the buyers show up once more.
Stocks continue the fade on more light volume.
Definitely no news to drive any upside in the pre-market and nothing the rest of the session either. The IMF, bolstered by the new Administration's embrace of all things non-U.S. talked of $4T in toxic debt for world financial institutions still to swallow. Of course the IMF, despite its grand name, is historically a terrible forecaster of anything economic. On Tuesday, given the market was already in pullback mode, the IMF's forecast weighed on the financials more than it would normally.
There was no other news to drive stocks pre-market. There is a pre-earnings vacuum and there are not any warnings to fill the void. That can be good, that can be bad; typically it is pretty good given that companies don't feel compelled to warn shareholders ahead of time. Of course this time around atrocious earnings are expected and thus warning things might be worse than Armageddon could be overkill. So, with no earnings news and financial stocks lower around the globe, the US markets were stymied at the open.
A gap lower, a rebound to midmorning, an attempted consolidation through lunch, but then a second leg lower as the afternoon session started took the indices to their session lows. A last hour rally similar to Monday held some promise but the sellers came back in with 15 minutes left and drove stocks back to the prior session lows. Buyers made a half-hearted attempt to step back in but they were not ready. Sellers were in charge, but volume was quite lighter again, so it was no resumption of the harsh selloff.
This is the second day of the selling, pullback, test, whatever you want to call it. When a stock is in a solid move upside or downside it will test with a 1-2-3 pullback to support or resistance and then renew the move. Many leading stocks are in this process as are the indices; makes since as the market is made up of stocks and lead by leaders. Some are already in their third day, meaning we will be looking for them to bounce back to the upside soon if they are going to do so. If the rally is going to hold those leaders will start back up first; that is what leaders do.
Thus we are looking for some more testing Wednesday and then we see if the buyers return. The potential fly in the ointment, the monkey in the wrench? It is a shortened week as Good Friday is a market holiday. With a 3-day weekend ahead, the buyers may not be ready to return this week but take a pass so to speak until next week.
TECHNICAL. Intraday was no picture of strength. Stocks started down, moved lower then attempted a midmorning recovery. Held that move through lunch and then it was new session lows. A last hour rebound looked good until the last few minutes when it collapsed back down to the prior session lows.
INTERNALS. Breadth was significantly lower at -3.5:1 NYSE and -3:1 on NASDAQ. Most stocks were lower, leader or not. Volume shows the real story: sellers were indeed in command of the session given the losses, but they were not overrunning the market. With volume so low it was a case of sellers no longer wanting to buy right now. No surprise that is what a pullback in an upside move is: the buyers push stocks higher with their demand for equities, then back off when sated a bit, only to move back in with renewed hunger and drive prices higher. The market is definitely in the pullback stage and the buyers have yet to get hungry for stocks once more, at least through the Tuesday close.
CHARTS. The indices gapped lower as the pullback continued. Pretty simple. SP500, NASDAQ, and NASDAQ 100 sold back to near support at the 10 day EMA. SOX gapped lower and sold through its 10 day EMA, but it held above the January peak. All of this is pretty much in line with a pullback session, indeed just what you would expect. The lick log is coming Wednesday and maybe even Thursday. SP500 and 800 is a key level (805 as well) and NASDAQ at 1525ish. If SP500 holds at that level and rebounds that is a positive for the index and the financials.
LEADERSHIP. Leaders continue their pullback with the indices. As noted above, some are in their second day along with the indices (e.g. MRVL, MCHP, MA, CME), some are already on their third day (e.g. BRCM, QCOM). So far pretty much normal for the leaders, and you would start looking for QCOM to try a move back up and the others to do the same Wednesday or Thursday. In one of the last alerts for the day we noted that the market doesn't issue any guarantees and indeed actually frowns upon them. Still, there are many great stocks that have pulled back and are ready to move in when they start their moves higher.
家园 THE ECONOMY Consumers continue to pull in the credit.
February saw a $7.5B drop in credit. January was up $8.1B, an apparent bright light or turn. No. it was a blip, a one up in five string of downside moves. Indeed, credit was up through August 2008 when it fell for the first time in who knows how long. Since August only two upside months as consumers pull back in the economic uncertainty. Well, not uncertainty; it is certain the economy is in the toilet.
January was up, not on the short term revolving credit (credit cards), but on a surge in durables buying and home buying. So toss that one out as the statistical aberration.
It is no surprise consumer credit is falling. Many say it is the consumer finally getting a handle on his or her finances and acting responsibly, something supposedly long overdue. You know, I am just sick of that crapola. Greenspan used to talk about the 'runaway' consumer. That is a bunch of BS from a guy who kept interest rates at 1% WAY TOO LONG and helped fuel the housing bubble on top of fueling the stock market surge and collapse before that. Who is runaway?
No, consumers are simply responding to the horrific economic conditions that our government and governmental agencies with their easy money, lack of enforcement, and forced lending got us into. Does the government tighten its belt and cut spending in order to help pay for its $11T in stimulus and bailouts? No; it places the burden on those citizens that did save, that did stay within their means, that were saving for the kids' education, and that are trying to pay for their own healthcare. So the responsible are cutting back because they are forced to do so thanks to bad governmental decisions that got us into the problem and bad decisions on how to get us out that have rung up an $11T debt, more than all prior presidents combined. Is it any wonder credit has turned negative 5 of the past 7 months?
What will be the test is whether citizens put up with this nonsense and continue funding it. The government causes these problems then tells those that were responsible they have to pay for it and put their family's future at risk what with the recession that already has them struggling and the tax hikes that are to come on incomes and via the carbon tax to come. Our President was over in Turkey telling those people how 'big changes' were coming to us back in the US with respect to energy use. Nice to know about it first here at home. So we kick you in the gut with the recession and take most of your savings that you had put in the stock market, then we stick the knife in your back by requiring you to pay for it all. It is time the US citizenry started voting with their wallets and purses and refuse to pay because money is the only thing our congressmen understand and if we decide to stop feeding the fat man as Ronald Reagan put it they might get the message that what prompted a revolution 233 years ago can prompt a revolution today, this one waged with our money.
家园 THE MARKET MARKET SENTIMENT
VIX: 40.39; -0.54
VXN: 41.07; -0.49
VXO: 40.11; -0.19
Put/Call Ratio (CBOE): 0.96; 0
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: 31.0%. A little rally and a climb in the bulls, up from 28.9% and jumping over the highs a month back at 29.7%. Still well below the 43.0%, the prior 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: 38.0%. Quite the drop from 43.3% and 44.3% the prior week. The decline was slowing its fall from 47.2%, the peak for the run this year but no more. 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. 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. 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: -45.1 points (-2.81%) to close at 1561.61
Volume: 1.806B (-7.32%). Another day of lower volume on the downside showing a lack of buyers versus an increase in sellers.
Up Volume: 185.504M (-440.702M)
Down Volume: 1.598B (+208.564M)
A/D and Hi/Lo: Decliners led 3.04 to 1
Previous Session: Decliners led 2.24 to 1
New Highs: 5 (-9)
New Lows: 14 (+7)
NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg
Gapped lower again, this time unable to rebound to hold 1600. NASDAQ did manage to hold the 10 day EMA on the close. Volume dried up even more, coming in well below average. NASDAQ is back in the 1500 to 1600 trading range and a test back toward the 18 day EMA at 1528 as a good pullback level for this test and then a higher low from there and a new run at he January peak.
SOX (-3.87%) struggled with a gap down and it sold below the 10 day EMA on the close. It did, however, hold the January peak, and a test down to the February high at 231 (closed at 236) puts it in good position to rebound.
NASDAQ 100 CHART: http://investmenthouse.com/ihmedia/NASDAQ100.jpeg
SOX CHART: http://investmenthouse.com/ihmedia/SOX.jpeg
SP500/NYSE
Stats: -19.93 points (-2.39%) to close at 815.55
NYSE Volume: 1.262B (-2.62%). As with NASDAQ the NYSE trade levels fell further below average. That is what you want to see on a test.
Up Volume: 199.198M (-194.01M)
Down Volume: 1.053B (+161.465M)
A/D and Hi/Lo: Decliners led 3.54 to 1
Previous Session: Decliners led 2.25 to 1
New Highs: 4 (+1)
New Lows: 49 (-1)
SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg
The large caps faded for the second session with a hefty point loss that took SP500 down near the 10 day EMA on the close. The 50 day EMA (803) is at a very good spot to act as support as it falls in the range of support for SP500 from 805 to 800. That is where we are looking for a test.
The small cap SP600 (-3.63%) was hammered as well, falling to the 10 day EMA on the close. It too has the 50 day EMA just below and at a decent support level at 225. Important for it to hold in that range though as we know, the small caps are nowhere near leaders at this point.
DJ30
The blue chips were hit as well as that last 15 minute selling binge pushed them along with the other sectors back down. It stalled at 8000, just below the October closing low (8175) and now it is ready to test back to the November low at 7552.
Stats: -186.29 points (-2.34%) to close at 7789.56
Volume: 276M shares Tuesday versus 247M shares Monday. Volume bounced some on the selling but still well, well below average.
DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg
家园 WEDNESDAY Two sessions left in this week. Wednesday we get crude inventories and February wholesale inventories. There is a low probability they will be market movers. Earnings are the focus and after hours Alcoa 'kicked off' earnings season as they like to say. If that was a kickoff then it netted negative ground. AA missed on the bottom line (-0.59 versus -0.56 expected) though revenues were a bit higher than expected. Call it a push. Call it whatever you want because AA is not a market mover.
The market is in a pullback phase and Wednesday is the third day. No Easter connotations there; it is just the way the market moves when it is moving well, i.e. 3-day pullbacks by good stocks follow by a new ascension. Better stop there.
What we are looking for Wednesday is another test and then we see how the buyers respond. The lower and lower volume shows the sellers are not racing in to drive stocks lower but instead shows sellers back off with some taking some profits while the remaining buyers regroup and look for new opportunity to the upside. If they step back in many stocks are in quite good position to move higher and we will be looking at those to grab for a rebound.
As discussed above the Friday holiday may put a crimp in that plan as buyers may not want to come in ahead of a 3-day weekend and risk the exposure. We will see. If there is an early selloff that sees SP500 find support in the 800 to 805ish range and we see good stocks bouncing we will be taking some positions, at least partial positions. That can give you a headfake, i.e. an early selloff and bounce off the low, but if SP500 holds those levels and bounces with NASDAQ holding the 1525ish range as well, that is pretty solid evidence of the buyers stepping in and worth some of our money that we have made the past several weeks getting put back to work.
Support and Resistance
NASDAQ: Closed at 1561.61
Resistance:
1569 is the late January 2009 peak
1587 is the March 2009 high
1598 is the February 2009 peak, the last peak NASDAQ made
1603 is the December peak
1620 from the early 2001 low
1644 from August 2003
The January closing low at 1653
1666 is the intraday January 2009 peak
1780 is the November 2008 peak
Support:
The 10 day EMA at 1560
1542 is the early October 2008 low
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.
The 50 day EMA at 1499
1493 is the October 2008 low & late December 2008 consolidation low
The 50 day SMA at 1474
1440 is the January 2009 closing low
1434 is the January intraday low
1428 is the mid-November 2008 low
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 815.55
Resistance:
818 is the early November 2008 low
The 90 day SMA at 828
833 is the March 2009 peak
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:
The 10 day EMA at 816
815 is the early December 2008 low
805 is the low on the January 2009 selloff. KEY Level
The 50 day EMA at 803
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
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 7789.56
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 90 day SMA at 7993
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 10 day EMA at 7784
7702 is the July 2002 low
7694 is the February intraday low
The 50 day EMA at 7682
The 18 day EMA at 7662
7552 is the November closing low. KEY Level.
7524 is the March 2002 low to test the move off the October 2002 low
7449 is the November 2008 intraday low
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
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.
April 7 - Tuesday
February Consumer Credit (14:00): -$7.5B actual versus -$1.5B expected, $8.1B prior (revised from $1.8B)
April 8 - Wednesday
February Wholesale Inventories (10:00): -0.6% expected, -0.7% prior
Crude Oil Inventories, 04/03 (10:30): +2.84M prior
April 9 - Thursday
March Export Prices ex-aq. (8:30): 0.1% prior
Import Prices ex-oil, March (8:30): -0.6% prior
Initial Jobless Claims, 04/04 (8:30): 669K prior
Trade Balance, February (8:30): -$36.5B expected, -$36.0B prior
April 10 - Friday
March Treasury Budget (14:00): -$157.0B expected, -$48.2B prior
家园 THE PLAYS: Upside: Still in pullback mode and more upside is setting up for a bounce.
Play Date: 04/07/2009
ISIL (Intersil Holdings--$12.64; -0.38; optionable): Semiconductors
http://biz.yahoo.com/p/i/isil.html
After Hours: $12.64
EARNINGS: Last week of April (last announced 1/28/2009)
STATUS: Breakout test. ISIL broke over resistance at 12 to start April, a strong move through a three week March consolidation. The strong break shows plenty of buyers to push it higher, and after this test ISIL will be in position to continue the breakout move. A successful test of the breakout is one of our favorite entry points. Looking for ISIL to test back a bit more toward the 10 day EMA (12.29) and then make the bounce where we will look to pick it up.
Volume: 2.926M Avg Volume: 4.037M
BUY POINT: Test the 10 day EMA at 12.30 and then on the bounce: $12.41 Volume=5M Target=$14.95 Stop=$11.54
POSITION: UFH GB - July $10c (77 delta) &/or Stock
http://www.investmenthouse.com/ci/isil.html
Play Date: 04/07/2009
MS (Morgan Stanley--$23.32; +0.01; optionable): Broker/dealer
http://biz.yahoo.com/p/m/ms.html
After Hours: $23.31
EARNINGS: Mid-June
STATUS: Pennant. MS has set up something of a pennant the past four weeks, bumping the 200 day SMA (24.60) at the highs in the pattern. On the downside of the base it has the rising 50 day EMA (21.64) as support, making higher lows over that level. This is part of a larger 3 month ascending base and a strong break over the 200 day is our entry point.
Volume: 45.463M Avg Volume: 47.632M
BUY POINT: $24.77 Volume=69M Target=$29.94 Stop=$23.04
POSITION: MS GY - July $24c (59 delta) &/or Stock
http://www.investmenthouse.com/ci/ms.html
Play Date: 04/07/2009
RIO (Companhia Vale Do Rio Doce--$14.45; -0.47; optionable): Steel and iron
http://biz.yahoo.com/p/r/rio.html
After Hours: $14.49
EARNINGS: 05/06/2009
STATUS: RIO is testing back from the gap higher to start the month, coming back to fill part of that move on lower, below average volume. RIO is building some higher lows after selling back from the early February run on the Obama infrastructure stimulus when everyone figured out the stimulus would not be anything immediate. RIO is making a higher low right here, and we are looking for RIO to hold and start back up on stronger volume.
Volume: 32.944M Avg Volume: 42.172M
BUY POINT: $15.11 Volume=50M Target=$17.94 Stop=$14.15
POSITION: RXO FC - June $15c (51 delta) &/or Stock
http://www.investmenthouse.com/cd/rio.html
New Buy Points on Current Positions:
Play Date: 04/07/2009
NVLS (Novellus Systems--$16.35; -0.79; optionable): Chip equipment
http://biz.yahoo.com/p/n/nvls.html
After Hours: $16.35
EARNINGS: 02/04/2009
STATUS: Test 200 day SMA. NVLS has made us some great money on this run already and it is making its obligatory test with the market the past two sessions, coming back on low trade Tuesday to test and hold the 200 day SMA (16.33). The test of the 200 day on lower trade makes this interesting, but it has to show some strong volume on the rebound as it clears the late March interim peak at 16.96 to show there is real conviction in sending it back up. Has been strong but it has to show us strength once more as it turns back up after this test.
Volume: 2.188M Avg Volume: 3.388M
BUY POINT: $17.04 Volume=5M Target=$20.45 Stop=$16.11
POSITION: NLQ FC - June $15c (68 delta) &/or Stock
http://www.investmenthouse.com/ci/nvls.html
Downside:
Play Date: 04/07/2009
DRI (Darden Restaurants--$34.27; -1.36; optionable): Casual restaurants
http://biz.yahoo.com/p/d/dri.html
After Hours: $34.27
EARNINGS: 06/23/2009
STATUS: Put. DRI gapped higher in mid-March on earnings and rallied, holding the 35ish level the past 3 weeks, moving laterally and trying to consolidate the big gap higher. Tuesday DRI was down on stronger, average volume, falling toward the bottom of the range. If it falls through the 18 day EMA (33.84) on a further rise in volume it looks as if DRI is heading to fill that gap down at 30. A move to that point lands a 44%ish gain.
Volume: 4.017M Avg Volume: 3.913M
BUY POINT: $33.78 Volume=4.3M Target=$30.65 Stop=$34.88
POSITION: DRI QG - May $35p (-46 delta)
http://www.investmenthouse.com/ci/dri.html