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主题：04/08/2009 Market View -- 宁子
家园 04/08/2009 Market View SUMMARY:
- Not the strong rebound you would like to see.
- Wholesale inventories fall as sales rise: the old chicken or the egg argument.
- Thursday is the last trading session ahead of 3-day holiday and light volume likely. Plenty of stocks set up to move higher.
A bounce. That's all.
Not a lot of schedule news but there was a lot of news. A little M&A activity in the homebuilders (Pulte acquiring Centex) and an 11% gain in purchase loan mortgages stirred the pot of the hopeful, prompting talk of a bottom in the housing industry. Maybe Pulte is more savvy than most businesses; typically when a business dumps certain product lines or prior acquisitions is when you see a bottom as management, as most people, despair and throw in the towel just when things are ready to turn. Again, maybe Pulte is the exception to the rule. Maybe.
The Fed and Treasury teamed up, indicating that they may put insurers under the TARP as well. The terms they use are 'open up' the TARP to those entities, but the code words we have come to know mean that the feds want to force insurers to take TARP funds just as they did to many banks during Paulson's reign of terror where backroom strong arming and threats cowed otherwise healthy banks into submitting to government takeover. Paulson said publicly that most banks had to participate for it to work. At the time we all felt he was just cajoling to get more banks involved. Now we find out he was stating the goal and then going behind closed doors to blackmail financial institutions into taking the funds and giving up significant control to the government. Of course they did not realize how much they were giving up: now the Executive branch has taken on the role of ousting management at its whim. It is no wonder that the TALF funds remain largely unused as companies shy away. There is only supposedly $100B or so left in TARP so maybe there won't be enough to take over the insurance industry, but don't be surprised if the TARP cap is pushed higher with funds likely taken from the unused TALF or just open up the taxpayers' wallets more. Hey, it is only another $1T according to Treasury.
Earnings were also out with Ryder (trucking) slashing guidance and saying no improvement in 2009. On the other side BBBY beat the street handily, increased guidance, and soared. FDO increased its guidance and was rewarded as well. The Fed minutes later in the session indicated the Fed feared a self-fulfilling spiral lower as individuals and businesses slowed spending further, exacerbating the already locked up credit market. All of this was sprinkled out over the session, and without a lot of volume on the day the news managed to push stocks around all session. Thus the volatility.
Early on in the morning futures were down but recovered after the Pulte news and stocks opened stronger, but it was volatile as noted. Rallied, tested, recovered to move over the Tuesday high, gave it back, then recovered again late in the session. Not bad action, but it was not very decisive and volume was holiday light. Leaders were moving up and that was a key, but again, it was all on light volume.
Watching the intraday action we opined in an early afternoon alert that there would be an afternoon test that would give us some entry points ahead of a late rally. That panned out and we got some buy points on NVLS and PCLN though with the light trade we were not loading up. We are looking for a further rally ahead of the earnings flood and then get a bit smaller once more as we did on the last run higher.
TECHNICAL. We said it above: volatility was the word as the indices traded up and down and back up a couple of cycles. The other word is again resilience. Up and down, in and out, but in the end the market, after two downside sessions, rebounding to close positive. No real strength but you see the upside bias reasserting itself after a rather predictable and orderly pullback.
INTERNALS. Solid though unspectacular breadth at 2.7:1 NYSE, 2.6:1 NASDAQ. Volume was mixed, this session rising on NYSE will falling a hair on NASDAQ. Okay, some rising volume on NYSE is a good indication on an upside session, but overall volume is so low that it means . . . nothing. Same with NASDAQ and its fourth straight session of below average trade. Holiday light and not likely to get better Thursday. That is okay. We will take a price only rise for now.
CHARTS. The indices tested for two days and bounced off near support at the 10 day EMA, but they did not make any definitive moves such as retaking the resistance breached last week. A bounce on the third day of a pullback, but that was it: a bounce without any power behind it.
LEADERSHIP. Wednesday started to see those leaders that pulled back three sessions ahead of the market start to bounce, e.g. BRCM, QCOM. Chips were bouncing nicely (e.g. NVLS, MRVL). Retail was back in the black again so to speak as the BBBY earnings showed the consumer is not dead and washed up on the shore. They are not spending a lot of time at Saks, but they are not dead. HOTT heated up again, surging back up off its Tuesday tumble. Consumer related stocks are moving well and indeed all of the leadership held on the test and look solid. Financials were a different story. There are leaders from the financial sector, but they were not participating Wednesday. They sat it out, and the pretty neat thing is that with them pouting the indices still rose as other leaders stepped in and pushed upside.
家园 THE ECONOMY Wholesale Inventories Tumble. Good or bad?
At -1.5% February inventories more than doubled the downside expectations and the -0.7% in January (revised from -0.9%). Sales rose 0.6%. Those are the facts.
Now the argument. Lower inventories mean less is being produced or the same amount produce and just more buying as seen given the rise in sales. Either way production is still quite weak. One side says this is bad: manufacturers are not making much and wholesalers don't need much and thus the fall is a bad thing. It will be reflected in the GDP numbers as a bad thing as inventories pump up GDP.
That in itself is a major problem. If inventories are high that often indicates a slowing economy and thus the increase in GDP based upon those bloated inventories provides a false sense of security as to economic health. The flip side is the other side of the economic cycle, the part that we are clearly in here. When that occurs, lean inventories ultimately mean rising production. As the economy recovers wholesale shelves will need to be restocked and that means manufacturing has to kick in to do so. Of course that is a positive.
Thus the cycle determines if inventory levels are good or bad. In this instance the sharp decline is a positive because when the cycle turns producers will have to get with it. Happened the last recession AFTER we finally got through all of that tech inventory. This time there was nowhere near the problem and thus companies are in much better shape in that sense. Once credit flows and there is a reason to produce, they will be willing, able and ready to do so.
家园 THE MARKET MARKET SENTIMENT
VIX: 38.85; -1.54
VXN: 40.5; -0.57
VXO: 39.27; -0.84
Put/Call Ratio (CBOE): 0.85; -0.11
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: +29.05 points (+1.86%) to close at 1590.66
Volume: 1.796B (-0.54%)
Up Volume: 1.485B (+1.3B)
Down Volume: 357.931M (-1.24B)
A/D and Hi/Lo: Advancers led 2.58 to 1
Previous Session: Decliners led 3.04 to 1
New Highs: 6 (+1)
New Lows: 10 (-4)
NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg
After a two-day pullback to the 10 day EMA NASDAQ bounced. NASDAQ started higher then came back to test the 10 day on the low and then started back up. That is that intraday third day test, sort of, and it was enough to push NASDAQ higher. It tapped at 1600 on the high but did not try to take it out. No volume to do that and thus NASDAQ remains below the February peak, but still in the uptrend and trying, though without volume, to put in a higher low.
SOX (2.89%) put in its own recovery, testing near the February peak and resuming the upside. That took it back over the January peak again and back toward the November high it took out last Friday. Not a lot of strength in volume, but chips remain a strong leadership sector in the market, indeed likely the strongest.
NASDAQ 100 CHART: http://investmenthouse.com/ihmedia/NASDAQ100.jpeg
SOX CHART: http://investmenthouse.com/ihmedia/SOX.jpeg
SP500/NYSE
Stats: +9.61 points (+1.18%) to close at 825.16
NYSE Volume: 1.316B (+4.26%)
Up Volume: 954.672M (+755.474M)
Down Volume: 346.01M (-707.288M)
A/D and Hi/Lo: Advancers led 2.73 to 1
Previous Session: Decliners led 3.54 to 1
New Highs: 4 (0)
New Lows: 48 (-1)
SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg
SP500 was no powerhouse though it did bounce off the 10 day EMA and tap the 90 day SMA on the high. No change in the pattern at all, just more low volume gyrating above the 50 day EMA and below the October low (849). Working in the range, trying to form up a new higher low here to make the next move and take out the 850 level.
SP600 (+2.14%) held its own as it too traded above the 50 day EMA while just below its own October closing low. As with SP500 it is trying to make a higher low shelf that it can break higher off of.
DJ30
The Dow was absent all session as it posted the smallest advance, just managing to hold the 10 day EMA on the low. No volume, no move, still below key levels at 8000 and basically needing the other indices to make the move. DJ30 was trying to lead and now it is not.
Stats: +47.55 points (+0.61%) to close at 7837.11
Volume: 255M shares Wednesday versus 276M shares Tuesday. Still no volume and that is okay as DJ30 is still in the testing mode.
DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg
家园 THURSDAY Some more economic reporting with weekly jobless claims, import/export prices, and the trade balance. Will they mean a whole lot? Not likely right ahead of Good Friday. On the other hand there will be light volume, and as seen Wednesday, that allows the few buyers and sellers to push the indices all around. The nice thing is that the leaders moved up well despite the volatility and we can get another nice move from them Thursday and perhaps into next week ahead of the big flood of earnings.
The questions we need to ask are the following. First, do we want to buy in on a further move upside ahead of a 3-day weekend? We added to some positions Wednesday on PCLN and NVLS. Some here in the room added some BRCM and others in their own accounts. We will likely see some more on Thursday as some of those leaders that have pulled back are ready to move again, e.g. WFR and TSM, as well as new plays such as NETL, ANF and others.
There are plenty of set ups out there; you just have to decide how many you want to get in here ahead of a holiday (if they show the move) and ahead of earnings. We like to try and get plays that don't have earnings themselves for awhile, i.e. they have already announced in February or March or don't announce until the end of April or on into May or June. There is definitely some upside momentum here with the leaders even with the light volume. Again, what we are looking at here is a continuing rise into earnings even if volume is light. We will ride it with our current positions and some choice new positions knowing that we will be happy with a shorter run given earnings season can turn the market further up or stall the move.
Support and Resistance
NASDAQ: Closed at 1590.66
Resistance:
1587 is the March 2009 high is getting put to bed again
1598 is the February 2009 peak, the last peak NASDAQ made
1603 is the December peak
1620 from the early 2001 low
1623 is the April peak
1644 from August 2003
The January closing low at 1653
1666 is the intraday January 2009 peak
1780 is the November 2008 peak
Support:
1569 is the late January 2009 peak
The 10 day EMA at 1565
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 1503
1493 is the October 2008 low & late December 2008 consolidation low
The 50 day SMA at 1476
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 825.16
Resistance:
The 90 day SMA at 827
833 is the March 2009 peak
839 is the early October 2008 low
846 is the April peak
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:
818 is the early November 2008 low
The 10 day EMA at 818
815 is the early December 2008 low
805 is the low on the January 2009 selloff. KEY Level
The 50 day EMA at 804
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 7837.11
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 7983
The April peak at 8076
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 7793
7702 is the July 2002 low
7694 is the February intraday low
The 50 day EMA at 7689
The 18 day EMA at 7680
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): -1.5% actual versus -0.6% expected, -0.7% prior (revised from -0.9%)
Crude Oil Inventories, 04/03 (10:30): +1.65M actual, +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
- 复 THURSDAY
家园 THE PLAYS: Upside: More stocks continue to set up for the upside.
Play Date: 04/08/2009
ANF (Abercrombie & Fitch--$25.66; +1.03; optionable): Teen apparel stores
http://biz.yahoo.com/p/a/anf.html
After Hours: $25.66
EARNINGS: 05/15/2009
STATUS: Flag. Okay the retail stores are performing and ANF has set up a good buy point for us. After trying to hold near 25 in October ANF had more selling, tumbling down into November. It found bottom and since January it has worked laterally, forming something of a double bottom and breaking higher to end March. It gave up that move but then started the year with a new breakout. This week it is testing that move, coming back to the October low and the January peak and then bouncing Wednesday on a solid jump in above average volume. The break higher took ANF over resistance and this pullback has tested that move nicely. The rising volume on the bounce is a solid indication the buyers are stepping back in at this inflection point. Ready to move in as ANF continues the move higher.
Volume: 4.707M Avg Volume: 4.178M
BUY POINT: $25.89 Volume=4.5M Target=$29.95 Stop=$24.08
POSITION: ZWR HE - Aug. $25c (62 delta) &/or Stock
http://www.investmenthouse.com/ci/anf.html
Play Date: 04/08/2009
CMI (Cummins--$26.69; -0.42; optionable): Engines, machinery
http://biz.yahoo.com/p/c/cmi.html
After Hours: $26.90
EARNINGS: 04/30/2009
STATUS: Test breakout/flag. CMI broke out from an 8 week Cup w/handle base to start April, surging higher on strong volume. It rallied to 30 and has tested this week, coming back to the breakout point Wednesday, tapping the 18 day EMA, and then rebounding to cut the losses. Low volume shows no heavy selling, just some quick profit taking. Nice test and ready to continue the break higher.
Volume: 2.961M Avg Volume: 4.25M
BUY POINT: $27.21 Volume=5.2M Target=$31.94 Stop=$26.11
POSITION: CME FE - June $25c (73 delta) &/or Stock
http://www.investmenthouse.com/cd/cmi.html
Play Date: 04/08/2009
NETL (Netlogic Microsystems--$27.81; +0.45; optionable): Semiconductors
http://biz.yahoo.com/p/n/netl.html
After Hours: $27.81
EARNINGS: Early May (last announced 2/03/2009)
STATUS: Test 18 day EMA. NETL is stair-stepping up in its uptrend channel, coming back the past three sessions to test the 18 day EMA (27.40) Wednesday, the level it has held since March. Volume is not great but the trend continues. Looking for a bounce off of the 18 day to move into the play and ride it up toward the top channel line.
Volume: 283.15K Avg Volume: 788.935K
BUY POINT: $28.31 Volume=925K Target=$32.38 Stop=$26.52
POSITION: LKT GE - July $25c (74 delta) &/or Stock
http://www.investmenthouse.com/ci/netl.html
Play Date: 04/08/2009
SINA (Sina.com--$25.46; +0.34; optionable): Chinese internet software
http://biz.yahoo.com/p/s/sina.html
After Hours: $25.30
EARNINGS: Mid-June (last announced 3/16/2009)
STATUS: Cup w/handle. SINA has broken its May 2008 to March 2009 downtrend, gapping through the trendline to start April. That move took it through its October low. It broke from a weeklong handle to its 14 week base on the move and has spent this week testing. It has come back to the 10 day EMA (24.65) on lower volume, holding the March high as it does. Looking for a solid break higher to give us the entry point.
Volume: 1.095M Avg Volume: 1.627M
BUY POINT: $25.97 Volume=2.1M Target=$29.95 Stop=$24.38
POSITION: NOQ FE - June $25c (59 delta) &/or Stock
http://www.investmenthouse.com/ci/sina.html
Play Date: 04/08/2009
TJX (TJ Max--$26.70; +0.95; optionable): Discount department stores
http://biz.yahoo.com/p/t/tjx.html
After Hours: $26.70
EARNINGS: 05/19/2009
STATUS: Cup w/handle. Nice 6 month base has set up, the past three weeks or the handle forming a pennant over the 18 day EMA (25.50). Good volume on the upside sessions as TJX bumps into the 200 day SMA (26.61). Wednesday TJX started to break through that level, and it looks ready to make a new breakout.
Volume: 6.691M Avg Volume: 5.974M
BUY POINT: $26.87 Volume=8M Target=$30.87 Stop=$25.48
POSITION: TJX GE - July $25c (63 delta) &/or Stock
http://www.investmenthouse.com/cd/tjx.html
New buy point on current position:
Play Date: 04/08/2009
TSM (Taiwan Semiconductor--$9.59; +0.15; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/t/tsm.html
After Hours: $9.59
EARNINGS: 01/22/2009
STATUS: After gapping higher to start April, and making us some great money in doing so, TSM has come back to test and on Wednesday filled that gap, reaching down toward the 18 day EMA (9.27) intraday and rebounding to positive. Nice test of the March high and a gap fill all in one. That puts TSM in position to resume its move higher as its breakout really came in March. That means this move should still have plenty of pop to it as it comes off of this test. Love it when leaders give us new solid entry points.
Volume: 21.95M Avg Volume: 23.409M
BUY POINT: $9.68 Volume=30M Target=$11.25 Stop=$9.22
POSITION: TSM GU - July $7.50c (83 delta) &/or Stock
http://www.investmenthouse.com/ci/tsm.html