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主题：04/22/2009 Market View -- 宁子
家园 04/22/2009 Market View SUMMARY:
- Another soft start is bought, but ahead of key earnings market closes flat.
- Geithner breaks form, provides a bit of a boost with further comments about stress tests, TARP repayment.
- Earnings still rewarded as after hours trade shows. Enough to start a new leg through resistance or just hold the current lateral move?
- Thursday key: how the after hours rallies on earnings hold.
Volatility ahead of key earnings.
The reality of earnings present and earnings to come were the driving forces at work Wednesday. Apologies to Dickens, but earnings are what matters right now though the day to day specter of government interference is a constant concern.
At the open stocks were weak on the MS earnings miss. After a string of solid financial results that some say are real, others say fiction, MS made no pretense things were fine as it missed big. A second consecutive weak start, this one looking weaker than Tuesday. Nonetheless, once again stocks rebounded on the heels of a lower open. Despite MS' earnings financials rebounded, getting a boost, from all places, from Treasury Secretary Geithner.
Used to be when Geithner talked the markets listened, and tanked. Today Geithner elucidated his thoughts from Tuesday's House hearing and TARP repayment. Geithner would "welcome stronger banks repaying funds" although "supervisors" have to make the judgment as to which banks could do so because the financial system needed to "maintain
Confidence and a deep enough pool of resources" to rectify the banking and credit crisis. He didn't say who those 'supervisors' are, but that didn't seem to matter as he went on to say he anticipates a "substantial amount of resources will come back." That was enough to fuel a recovery from that opening slump, but in the end it was not enough to win out the day.
With AAPL (the clear market leader) announcing earnings after hours there was anticipation of strong results. Apple was an early leader Tuesday, and it along with a recovery in financials pushed the market nicely higher. Indeed NASDAQ rallied 36 points, led by of course, AAPL. Then a 5 hour trading range into the last half hour. Then anticipation turned to cold feet. NASDAQ lost 33 points from the high. A lot of running to end up flat, pretty much what the market has done of late as it trades laterally in its range.
TECHNICAL. Intraday was a smorgasbord. Low start then a strong upside surge, then back to flat. The action shows the indecision the market has shown of late and ahead of a few key earnings reports, particularly after MS cast doubt on the veracity of the financial earnings that had handily topped expectations. A bit of a credibility gap was developing.
INTERNALS. Breadth matched the session, all over the map then closing flat. Volume was more interesting with both NYSE and NASDAQ trade rising and putting in solid above average sessions. The late selloff took the bloom off the rose and thus the day was more of a churn, i.e. high volume turnover or running in place. That is very much in line with the overall market action of late, i.e. the fade from a good run at resistance and the sideways movement since. In other words, a bit of indecision, but if indecision only leads to sideways action, that isn't bad.
CHARTS. SP500 rallied through 850 resistance, NASDAQ move through the January peak again, and SOX recovered from the Monday drubbing, rallying through the 200 day SMA. Then they all reversed and gave up those levels on the pre-AAPL cold feet. That continues the overall indecision of the indices after the last run that took them through resistance only to give it back. There is a character change ongoing from the move straight up; the volatility the past week shows there is a fight starting back up between sellers and buyers. They are, however, holding nicely, stretching out a lateral consolidation range. Given the move to this point, the ability to hold gains and put in a lateral consolidation is impressive. Now we see if AAPL and company can bring about a new breakout attempt or keep the lateral consolidation working.
LEADERSHIP. After a short respite the chips looked good . . . and not so good. Some really great looking patterns but also enough of a late fade to get us to take the rest of the SMH gain off the table. Big techs were up again, quite a few are extended. They moved up ahead of Apple earnings then they moved back down ahead of AAPL earnings. Retail remained solid along with eateries even if MCD sold on its earnings. The common theme, however, is that many of the early leaders are extended or are working on bases. There are some good looking upside patterns that can fill a void, but they will likely need most of the market to hold up if they are going to make strong moves. If the overall market keeps this lateral move going new leaders can breakout and rally nicely. If the after hours earnings control even these extended stocks can take off on a new run, and they would help out stocks such as VSEA trying to make a new breakout.
家园 THE MARKET MARKET SENTIMENT
VIX: 38.1; +0.96
VXN: 39.24; +0.8
VXO: 38.82; +1.43
Put/Call Ratio (CBOE): 0.78; -0.06
Bulls versus Bears:
This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market doesn't have the cash to drive it higher.
This is a historical milestone in the making. Bulls are impressively low considering we are in general a very optimistic country. The few bulls is a positive indication because it means most everyone that is getting out is out and there is money on the sidelines. In other words the ammunition boxes are full and as the market recovers investors will start opening up the boxes and firing. Little by little they will be forced to put more money into the market and there will be some rushes higher in fear they are missing the train. You relish times when sentiment is so negative because it means some tremendous buys are setting up. This could indeed be the opportunity of a lifetime, and you take advantage of it by buying quality stocks and letting them work for you as long as they will. If we can hold them for years, great.
Bulls: 43.2%. The market rally has revved up the bulls, jumping up from 36.0% the prior week. The sharp jump in the bulls continues. Back over the 35% range considered bullish, but as noted this is not a bearish indication yet. Has to get up to the 60% to 65% level to be bearish. Dramatic rise from 21.3% in November 2008, the bottom on this leg. This last leg down showed us the largest single week drop we have ever seen, falling from 33.7% to 25.3%. Hit 40.7% on the high during the rally off the July 2008 lows. 30.9% was the March low. In March the indicator did its job with the dive below 35% and the crossover with the bears. A move into the lower 40's is a decline of significance. A move to 35% is a bullish indicator. This is smashing that. For reference it bottomed in the summer 2006, the last major round of selling ahead of this 2007 top, near 36%, and 35% is considered bullish.
Bears: 34.1%. Continuing their decline, falling from 37.1% the prior week. Well off the high on this run at 47.2%. Hit the 34's on the lows, falling from 38.5% and 46.2% in mid-December. Just slipped below the 35% level considered bullish for stocks. Bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment on this move. 35% is the level that historically indicates excessive pessimism. Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.
NASDAQ
Stats: +2.27 points (+0.14%) to close at 1646.12
Volume: 2.583B (+7.89%). Good jump in volume and it may turn out to be positive as a lot of downside occurred late as positions were squared ahead of AAPL earnings. Again, how the earnings announcers are treated will tell this story.
Up Volume: 1.562B (-360.958M)
Down Volume: 1.077B (+586.637M)
A/D and Hi/Lo: Advancers led 1.1 to 1
Previous Session: Advancers led 2.9 to 1
New Highs: 0 (-9)
New Lows: 0 (-15)
NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg
Gapped lower and surged higher, matching last week's high at the January peak. It fell back to flat and remains in the range from 1600 to 1680ish. Is the failure to make the break bad? Not if NASDAQ continues moving laterally and builds a nice flat consolidation in this range and makes a new breakout. Again, may sound like a broken record, but how the earnings are treated and its response to them will tell the tale.
SOX (+4.33%) was back in the saddle Wednesday, surging off the test back to the February peak all the way to the 200 day SMA and a yet another new bear market high. It got there and could not hold it. It peeled off and closed at the early April peak. With that lower low the past week and the fall from the 200 day we closed the rest of the SMH play. Not dead, can still consolidate, and there are still some chips in great position to rally. It has a nice cushion to consolidate from the 200 day to the January peak. No problem with that.
NASDAQ 100 CHART: http://investmenthouse.com/ihmedia/NASDAQ100.jpeg
SOX CHART: http://investmenthouse.com/ihmedia/SOX.jpeg
SP500/NYSE
Stats: -6.53 points (-0.77%) to close at 843.55
NYSE Volume: 1.771B (+5.93%). Rising, just above average trade, but similar to NASDAQ with the surge and then giving it up. Not great price/volume action.
Up Volume: 745.426M (-705.14M)
Down Volume: 1.011B (+801.704M)
A/D and Hi/Lo: Advancers led 1.18 to 1
Previous Session: Advancers led 3.34 to 1
New Highs: 13 (+4)
New Lows: 60 (+15)
SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg
Rallied further past 850 but never came close to next resistance at 875 before it turned back down and closed BELOW 850. Don't want to make too much of that but point out that SP500 has made a lower low similar to SP500 and is threatening a lower high here. It can still just wander laterally and consolidate, setting up a new run higher. Nothing definitive yet but there is a character change that it is working through and we are ready for either the upside or downside.
SP600 (+0.62%) took something of a breather after some breakneck up and down sessions. It hig a new high on this run and then peeled back. SP600 looks good compared to most other indices, and that is a positive for the continued rally move even if it slides into a lateral consolidation even more than now.
DJ30
Bounced down from 8000 this week and is right in the middle of the 7500 to 8000 range. Low volume. The blue chips are ahead of most in consolidating as they were laggards in moving up. Hey, leadership rotates. We will see if the Dow is an early mover out of the lateral consolidation.
Stats: -82.99 points (-1.04%) to close at 7886.57
Volume: 387M shares Wednesday versus 424M shares Tuesday.
DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg
家园 THURSDAY Economic data starts back up with initial claims and existing home sales. The big news for the morning will be the after hours earnings from AAPL and EBAY and how they are treated by investors. Oh yes, there is also word from GM that it is going to have to shut down its plants for 9 weeks this summer and could still miss payments to its creditors. Things are not as great on the recovery front as hope. Hope is a good thing; it sustains you in bad times. Thanks, 'Shawshank Redemption.' Foolish hope, however, can hurt you. The bank earnings and some of the industrial earnings reports suggest there is too much foolish hope out there.
We definitely DON'T want to appear overly negative, especially when stocks have been surging and were up after hours. After such a strong run, however, we have consistently used the surge to take profits. Now there is some indecision in the market action after the long run. It does not mean the run is over. As noted above, it is and can continue to move laterally and consolidate, setting the stage for another move. That is why we are not sweating the after hours earnings when we took some good gain ahead of them. We banked a lot of money and will ALWAYS have an opportunity to play the earnings results down the road after the initial move, up or down, is made and consolidates. AMZN made us a ton on its January post-earnings move after it consolidated its gap and we were not anywhere near the stock when it announced its results.
Will a renewed move come Thursday? Likely not. AAPL is up after hours but it only made it back to 125 where it was trading on its Wednesday high. There was no 10 or more point surge on the news. It is extended. EBAY beat the street but its earnings were crappy for EBAY earnings. This has to be worked out by the market that has rallied well and is a bit weary and taking a deserved pause.
Asia is lower right as this is written roughly around a half percent; no major meltdown but not a resounding response to the AAPL news. US futures are down just a hair though NASDAQ is up 0.43%. Doesn't mean much now. It is a long time to morning but you get a sense that the earnings were not overpowering everything to the upside.
As the market is working through a consolidation that can be a potential new rallying point or can break down, we are going to continue to be ready to play the move whichever way it happens. Some stocks will break higher, some will break lower, others will trade in a range. Those are all moves we can make money on as the market works off the excess from the last run and sets up for its next move.
Support and Resistance
NASDAQ: Closed at 1646.12
Resistance:
The January closing peak at 1653 (intraday)
1661 is the April 2009 prior peak
1666 is the intraday January 2009 peak
1780 is the November 2008 peak
The 200 day SMA at 1778
1947 is the October gap down point
Support:
The 18 day EMA at 1604
1623 is the early April peak
1620 from the early 2001 low
1603 is the December peak
1598 is the February 2009 peak, the last peak NASDAQ made
1587 is the March 2009 high is getting put to bed again
1569 is the late January 2009 peak
The 50 day EMA at 1545
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.
1493 is the October 2008 low & late December 2008 consolidation low
S&P 500: Closed at 843.55
Resistance:
846 is the April peak
848 is the October 2008 closing low
853 is the July 2002 low
857 is the December consolidation low; cracking but not broken
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:
842 is the early April peak
839 is the early October 2008 low
833 is the March 2009 peak
The 90 day SMA at 825
818 is the early November 2008 low
The 50 day EMA at 818
815 is the early December 2008 low
805 is the low on the January 2009 selloff. KEY Level
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
Dow: Closed at 7886.57
Resistance:
7909 is the early January low
7932 is the March 2009 peak
7965 is the mid-November 2008 interim intraday low.
The early April peak at 8076
The April peak at 8113
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:
7882 is the early October 2008 intraday low. Key level to watch.
7867 is the early February low
The 50 day EMA at 7783
7702 is the July 2002 low
7694 is the February intraday low
7552 is the November closing low. KEY Level.
Economic Calendar
These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.
April 20 - Monday
March Leading Economic Indicators (10:00): -0.3% actual versus -0.2% expected, -0.2% prior (revised from -0.4%)
April 22 - Wednesday
04/17 Crude Oil Inventories (10:35): +3.8M actual, +5.670M prior
April 23 - Thursday
04/18 Initial Jobless Claims (8:30): 630K expected, 610K prior
Existing Home Sales, March (10:00): 4.65M expected, 4.72M
April 24 - Friday
March Durable Orders (8:30): -1.5% expected, 5.1% prior
Durable Orders, Ex-Auto, March (8:30): -1.2% expected, 3.9% prior
New Home Sales, March (10:00): 340K expected, 337K prior