主题：10/01/2008 Market View -- 宁子
这是我花钱买的，觉得还行，贴出来和大家分享。如果大家喜欢，能提升一下这里的人气，我就接着贴。这个贴只做参考，不要做为炒股依据。换句话说，赔钱不要找我哈。
SUMMARY:
- Market backs off, once more awaiting a bailout decision.
- GE next in line at the Buffett well. Savior or Mr. Potter with an affable smile?
- ISM disappointment is a setback for improving economic data, indicating the credit freeze has yet to be felt impact.
- What if a bailout worked as planned and didn't help the economy?
- September lives up to its infamous reputation and now we see if October can again play the market bottom month.
A quiet session after a lot of violent moves.
Big selloff, big bounce, then nothing. Stocks started lower and you could blame a 23% decline in weekly mortgage applications and GE getting its target cut by analysts. There was definitely no new money coming into the market even with the start of a new month and a new quarter. A better ADP jobs index (-8K versus the -50K expected), LIBOR rates coming down, and lower crude yet again (supplies rose 4.3M bbl versus the 2.8M expected) could not get things loosened up.
Nonetheless stocks started lower and were bouncing after the first half hour. Then the ISM came out and at 43.5 it was well off expectations and the recent range at 50ish. That rattled investors and stocks sold to session lows with NASDAQ down 45 points, DJ30 down 220 points. Buffett struck again, however, putting $3B into GE though as with the GS deal, he got a lot more value than $3B with perpetual preferred stocks with 10% dividends, rights for more shares, etc.
Everyone hangs on Buffett's every word as if he dispenses his knowledge with no motive other than to make you happy and wealthy, something like a financial Santa Clause. Buffett never uttered a word that was not designed to make him money. All he said as the financial crisis was nothing other than an occasional he saw no value. Of course not; he wanted things to get really ugly and he coveted some financial institutions for his Berkshire Hathaway. There was no commentary at all from Buffett and then bang, he puts $30B in GS. Then bang, another wad of money into GE. Then he gets on the air and says the bailout has to take place or we are in for a financial last supper or something like that. Now he wants it passed because it boosts his investments.
No, Buffett is no great benefactor out there to help us all get through this. He is doing what Potter did in 'It's a Wonderful Life' during the bank runs of the 1930's: everyone was selling but he stepped in and bought. He simply has a better smile and doesn't wish harm on anyone. He is a businessman who takes care of his investors. That is why the give him money and he doesn't let them down. Problem is, however, our legislators and others fawn all over him for advice. He will give it, and it will be sound advice of the kind that benefits his interests.
In any event that helped buoy the market and the indices rallied and took out the morning high. The rest of the afternoon was volatile and after SP500 and DJ30 turned positive mid-afternoon the indices finished lower. Couldn't hold all of the recovery, but it was not bad action. The market can stall around for a few sessions and then break higher once more and show the follow through, indicating the market has a chance at putting together a more sustained upside move. We will see.
TECHNICAL. As noted the intraday action was not that bad. A lower open, a midmorning selloff, and then a recovery close to flat on the NYSE large caps. When taking a breather after a big rebound this is what you want to see.
INTERNALS. After what the market reeled off the prior two sessions and indeed over the past month, the Wednesday action is hardly worth mention. Flat breadth, much weaker volume falling to average on NYSE and below average on NASDAQ. Flat internals matching the market, and that is just what you want to see on a market day off.
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CHARTS. Before the Monday selloff and even after the Monday selloff we were talking about DJ30 and how it is still in the running for a double bottom here with this being the second bottom following the July low. Still a bit early to make that call but the sentiment levels hit extremes as the lows were made with the massive, multi-hundred point swings in the Dow. I teach in my seminars that trend changes in the market are just like changes in the weather. During the season the weather is calm, in line with the season. There is an occasional storm, but that is in keeping with the season. When the seasons change, however, the weather turns violent. Fronts come and go, warm and cold air collide, dry and wet weather collide, storms spin off. Violent storms as the new season with its different weather clashes with the season in place. When the change is complete the tempests die down. These massive point swings and widely disparate sentiment and internal indicators show there is a season change at hand.
Moreover, when you look at where DJ30 has tested, there is more credence that this level, though maybe not this particular pattern right here, is going to try and act as support. If you look at a multiyear chart of DJ30, this 10,800 level is the midrange of the 199 to mid-2001 range, and it is also basically the top of the 2004 and 2005 lateral move. A stock or index in a major selloff tends to give back the prior run and hold at prior tops. As indicated, DJ30 is at the pre-recession peak and the initial recovery peak following the recession and market recovery. SP500 is basically in the same situation, tapping at the midrange of the 2004 lateral consolidation on this weeks selling. That suggests these indices are at levels where they can find bottom and launch a new upside run. The massive bailout bill, despite its horrible implications with respect to federal government bloat, may be the trigger to the move.
The BIG caveat (you knew it was coming): If this is THE meltdown where all of the past Greenspan liquidity bailouts for 18 years comes back on us in a flood of dollars as foreign confidence in the US tanks, then the support points from the past decade are not going to hold it. There is that massive run from 1995 through early 2000 that was part of the Reagan 'new America' created when his policies helped break inflation, but that 1995 to 2000 move was much too strong for sustained growth and was fueled by the Greenspan era of easy money and a policy of dumping liquidity at any financial hiccup. This credit crisis is of the nature of what we will see some day (and not be able to avert) as a result of that policy of massive liquidity to prevent a recession at any cost. Those billions and indeed trillions of dollars in foreign hands will some day come home. At some point we won't be able to outrun the tide with more massive liquidity injections. At some point that policy won't carry the day and they will dump dollars on us and the currency will deflate and inflation will run wild while our hard assets deflate along with the currency.
If the bailout is enough (fittingly it is the largest ever; it will take more and more each time) then we put it off for another period of time and the market rallies. All is well (except for our children who have to live with a government now in our financial institutions, a position it will be loathe to give up and of course the ultimate reckoning) and our cars and homes are safe for now. IF the bailout is not enough, however, the Dow goes down to 7000ish near term. If we take the wrong steps and don't spur the economy in the RIGHT way, e.g. marginal tax rate cuts, tax credit incentives (R&D, business capital equipment, personal investment/savings), zero capital gains tax, zero or low corporate taxes, then we suffer a sharp and deep recession that takes the Dow to the 1994 levels just below 4000 as ALL of the Greenspan liquidity fixes are overturned. That would not even do it all, but that would be enough. If SP500 follows that would take it down to 460ish with a stop at 750ish along the way.
As you can see, the stakes are big. Huge. Our point: If this is THE big meltdown, then the bailout won't fix the problem. The problem is a debased currency through excessive liquidity. The bailout only adds more liquidity on top of worthless mortgage assets, basically liquefying bad assets to make them appear valuable. The way to fix that is to let the bad assets go to zero as they should and not divert good money after them. Instead, use that money to incent real capital investment in the US to create new technologies and assets once again just as in the early 1980's when we came back from the brink after 16 years of huge federal expansion and regulation that choked our economy and our entrepreneurial drive. We need to get us back to investing in real assets in the US, not 'no doc, no credit, nothing down' mortgages that were not worth the paper they were written on.
LEADERSHIP. Strong financials, not all, are looking good. These are the ones without the crap on their books and they are looking solid; the bailout won't hurt them at all. They are getting all the money because of their strength. Homebuilders are still setting up just fine. Some health care/medical remain strong. Food purveyors, at least some of them, look pretty good (PEET, MCD, SNS). Food makers/processors also look decent (CPB, KFT). Those latter groups are not frontrunners for a strong economy. A definite mix of defensive and growth/early cycle stocks. Shows the market's indecision. Want to see new leadership groups stepping up. It doesn't help that transports, early leaders in the economic recovery story, look to be rolling over.
THE MARKET
MARKET SENTIMENT
VIX: 39.81; +0.42. Hit 42.38 on the high, its third straight day topping 40 on the high with that 48.40 peak on Monday.
VXN: 42.92; +0.34
VXO: 45.27; +0.76
Put/Call Ratio (CBOE): 0.99; -0.31
Bulls versus Bears:
For the second time this year bears are crossing above bulls, doing so basically where they did in March on their way to much more extreme readings just about the time the market made the March low and started the last rally. Positive for the market and if SP500 is going to hold the long term trendline is the place to do it.
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.
Bulls: 37.5%. Not much of a drop from 37.9% last week. Down, but just edging lower, indicating most don't understand the gravity of the credit situation. A dive under 35% would be a positive given the inverse nature of sentiment indicators. Down from 40.7% on the high during the rally off the July lows. Turned back up before it got down to 35%, below which is considered bullish for the market as the number of upbeat investors is relatively low. A long way up from the 27.8% on the low this round. Hit 31.9% two months back and the 30.9% low hit in March. Steep drop from a rebound high at close to 50% on the run through May. In March the indicator did its job with the dive below 35% and the crossover with the bears. Now it is going above and beyond. Bulls and bears have crossed over again, doing so even before the prior lows are hit. The bulls and bears were eye to eye in mid-February and have crossed. 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: 40.9%. Bears fell from 43.7%, apparently on the belief a bailout will immediately cure the market's woes. It won't but these guys will apparently need to be convinced. Unfortunately, they will likely get that education over the next several months. If the bulls turn over and crap out below 35% again that would be a strong signal. Interestingly they are still 'crossed over,' i.e. more bears than bulls. Moving toward 50.0%, the high on this move, but a long way off. As the NYSE indices test the lows you would want it higher. Still above the 35% threshold so still a bullish indication. A steady rise to 50% on this move: 48.9%, 47.3%, 44.7% and 39.3% before that. Well above the bullish level and the highest since 1995. Again, that is one of the best indications that sentiment is getting extreme on the negative side. It is again past 35%, the level that historically indicates too much pessimism. As with the bulls the jump in bears did its job after hitting 44.7% in the third week of March that was up from an already freakishly strong 43.3% the week before. Up sharply from a low of 19.6% on the last rally. 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: -22.48 points (-1.07%) to close at 2069.4
Volume: 1.931B (-10.05%)
Up Volume: 486.606M (-1.52B)
Down Volume: 1.435B (+1.067B)
A/D and Hi/Lo: Decliners led 1.71 to 1
Previous Session: Advancers led 1.9 to 1
New Highs: 7 (-8)
New Lows: 155 (-104)
NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg
NASDAQ is not the leader, at least to the upside. Its pattern is not like the NYSE large caps as it broke down from a head and shoulders and has yet to make it even back up to the neckline on the rebound. It is not dealing from a position of strength and indeed with many large cap techs in swan dives they are not ready to lead back up. NASDAQ is at the 2004 highs having fallen through the 2006 and 2005 highs. It might not be in position to immediately recover, but it is in position to start to put together a bottom. It has a ways to go in doing that, but it can work on it while DJ30 tries to lead.
Haven't mentioned SOX (-1.19%) in quite awhile. Why? Because it has shown no inkling of leadership either way. It is a whipped dog, tagging along on all of NASDAQ's moves.
NASDAQ 100 CHART: http://investmenthouse.com/ihmedia/NASDAQ100.jpeg
SOX CHART: http://investmenthouse.com/ihmedia/SOX.jpeg
SP500/NYSE
Stats: -3.68 points (-0.32%) to close at 1161.06
NYSE Volume: 1.369B (-14.43%). Average volume, leading the NASDAQ and its low volume.
Up Volume: 698.382M (-712.817M)
Down Volume: 665.492M (+497.709M)
A/D and Hi/Lo: Decliners led 1.02 to 1
Previous Session: Advancers led 3.96 to 1
New Highs: 17 (+9)
New Lows: 237 (-107)
SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg
Held steady right at the mid-September low, holding the Tuesday rebound, taking a breather, on lower, average volume. Its test is a bit deep to hold and result in a double bottom, but if the Dow is ready to lead and some financials looking solid, SP500 will follow along. As noted above it is at the 2004 levels, a point it could find support, particularly if DJ30 does. Still that ugly multiyear double top that would be the classic pattern for that meltdown discussed in the market summary above, but we won't go there right now.
SP600 (-0.53%) again held above the January, March, and July lows, bouncing Tuesday and hanging onto the gains for the session. It is still in a trading range, not making new lows on the selling. That is an overall positive for the market and economic outlook, but it is a long way from a new breakout.
SP600 Chart: http://investmenthouse.com/ihmedia/SP600.JPEG
SP400 CHART: http://investmenthouse.com/ihmedia/SP400.jpeg
DJ30
A lot of print tonight analyzing the DJ30 pattern. The flat session on lower volume shows it is still in position to make a double bottom and then make a new breakout off of the 2004/2005 peaks.
Stats: -19.59 points (-0.18%) to close at 10831.07
VOLUME: 108M shares Wednesday versus 319M shares Tuesday. Good low volume pause after the recovery, but it still has to play out, meaning it has to make its move after this pause, i.e. a follow through or roll back over.
DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg
THURSDAY
September certainly lived up to its reputation as the worst month for the market and it saved the best for last. Now we see if October lives up to its rep as the month the market's selloffs bottom.
DJ30 is trying to put in a double bottom over the 2004 highs. The market internals were extreme. Sentiment is extreme. Violent point swings. Issues are being eliminated in the form of financial institutions that failed or were taken out. It all adds up at least to the process of bottoming.
Now you look to see what stocks break higher out of solid bases. Some have been doing so such as the leading financials. At the same time we look for the indices to provide a follow through sometime from Friday to Tuesday, i.e. another big upside move on strong volume and with good breadth. That sets the foundation for a new sustained rally. Of course the market has to produce leaders to pave the way or else the follow through will not morph into a sustained new bull run.
The indicators all suggest a bottom trying to bounce to a new rally though leadership is a bit thin. The wildcard, the thing that clouds the picture, is the bailout band aid. Maybe it works to put the bottom in; the financials will certainly like it. On the other hand, the government is spending all its potential economic rescue money on buying worthless mortgages and won't have any to stimulate the economy if the credit freeze leads to a recession as some data suggest. That is what made this bailout so difficult because many feel it is not the solution that addresses all of the problems that we have in front of us.
As always it is incumbent upon us to watch for a follow through and watch what the leaders in financials (always an important leadership group in any recovery), homebuilders (early cycle), biotech/medical (defensive yet growth) do. We have several on the report, have bought some, and if they make strong breakouts we will add some more.
At the same time the indices are at the nascent stages of trying to turn the selling into a significant advance while in patterns that are best described as downtrends. A lot can upset the cart along the way to a follow through. The House still has to pass the bill the Senate just passed. The market would rally on the bailout passage by the House, but then we see if the market then prices in a recession or continues the breakout. We have looked at some downside positions on the indices, but we will have to wait now and see the House decision. We expect that to pass, lead to a bounce, and then the real reckoning begins. That is when we will look at more downside on the indices. There are individual stocks, however, that still look ripe to fall regardless of the overall market, and we will look at those.
Basically for now we look for strong stocks ready to break higher and lead a follow through move. As noted above, the leadership ranks are still thin and a rally needs plenty of growth stocks to lead it. If more stocks don't step up that casts doubt upon any follow through and we just have to keep on our toes in the event there is a stall in the indices and a volume turn lower. The indicators suggest a bottom is trying to make the market turn but it has to be backed up with high quality stocks. Just keep that in mind as the market makes a run at a new rally following the bailout passage. With the House still to vote as late as Friday morning (along with the jobs report), Thursday could be a wait and see session.
THE PLAYS:
Upside: Looks as if there is still more upside on the prospects of a new vote on the bailout. Looking at some solid upside plays that are in good bases, holding up all along.
Play Date: 09/30/2008
IWM (Ishares Russell 2000 ETF--$68.00; +3.00; optionable)
http://biz.yahoo.com/p/i/iwm.html
STATUS: Rolling. Held at the January, March, and July lows on the gutting last week, turning up Tuesday. Once more it is the rebound in its range. Looking to move in and ride it on up to the penultimate resistance in the 9 month range; if it still looks strong we can take some off the table there and see if it makes it to 76. Well that is getting ahead of ourselves on this one. In any event, it is hard to ignore the well defined trading range.
Volume: 108.273M Avg Volume: 119.974M
BUY POINT: $68.21 Volume=150M Target=$73.88 Stop=$67.11
POSITION: IQQ LP - Dec. $68c (51 delta) &/or Stock
http://www.investmenthouse.com/cd/iwm.html
Play Date: 09/30/2008
PHHM (Palm Harbor Homes--$9.91; +0.16; no options): Manufactured housing
http://biz.yahoo.com/p/p/phhm.html
EARNINGS: Mid-October
STATUS: Double bottom w/handle. Spending the past six weeks forming a double bottom with handle over the 50 day EMA (8.80). This pattern is the handle to a much larger 11 month base of the same name. Big break higher Friday then a quick test back to near support at the 18 day EMA (9.54), looking very solid there. Waiting for the next surge to give us a buy. Not a ton of volume but it is under accumulation and it can run very nicely when it gets going and make us a very nice gain. This sector is forming up very nicely.
Volume: 97.575K Avg Volume: 134.583K
BUY POINT: $10.55 Volume=250K Target=$13.75 Stop=$9.81
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ci/phhm.html
Play Date: 09/30/2008
USB (US Bancorp--$36.02; +3.27; optionable): Midwest banks
http://biz.yahoo.com/p/u/usb.html
EARNINGS: 10-21-08
STATUS: A big pattern spanning just over a year and one-half, USB is one of the banks that has held up very well. It made a sharp dip in the summer but rebounded just as quickly. Moved laterally and then broke higher this month, showing good volume ahead of the bailout news, so there was buying ongoing ahead of the bailout and you can see the strong money flow leading higher even as USB moves laterally the past week. Looking for USB to make the breakout move and follow the money.
Volume: 24.104M Avg Volume: 25.903M
BUY POINT: $36.69 Volume=30M Target=$42.75 Stop=$34.31
POSITION: USB AG - Jan. $35c (60 delta) &/or Stock
http://www.investmenthouse.com/ci/usb.html
Downside:
Play Date: 09/30/2008
DUG (Oil & Gas Ultrashort ETF--$38.85; -3.73; optionable)
http://biz.yahoo.com/p/d/dug.html
STATUS: Oil was up Tuesday but that was after a bludgeoning Monday. Oil has cracked on worries about the world economies. Now a bailout plan by the US may impact oil's pricing short term, but it has been rather immune to what the US bailout was doing, focusing instead on weak economic reports from the rest of the globe. Thus after this relief bounce we are looking for oil to fall and move toward a key test at 85. DUG will move higher as oil moves lower.
Volume: 12.71M Avg Volume: 23.102M
BUY POINT: $39.22 Volume=25M Target=$43.97 Stop=$37.89
POSITION: DUG KM - Nove. $39c (59 delta) &/or Stock
http://www.investmenthouse.com/ci/dug.html
Play Date: 09/30/2008
SPY (S&P Depository Receipts--$115.99; +4.61; optionable)
http://biz.yahoo.com/p/s/spy.html
STATUS: Put. Getting out in front of the curve on this one, but want to be ready as the vote for bailout seems to have a lot of twists and turns. Expecting a bounce up to 120 (1200 on SP500) and we will see how that acts as resistance. If things fall apart on a bailout then that is a logical place to fail. Indeed even if the bailout is passed that may stymie SP500 though a bailout 'yes' vote likely will push it up toward 1250. In any event we will be ready either way.
Volume: 329.028M Avg Volume: 298.18M
BUY POINT: $119.78 Volume=320M Target=$115.11 Stop=$120.88
POSITION: SPY WP - Nov. $120p
http://www.investmenthouse.com/ci/spy.html
THE PLAYS:
Upside:
Play Date: 10/01/2008
BWLD (Buffalo Wild Wings--$40.76; +0.52; optionable): Restaurants
http://biz.yahoo.com/p/b/bwld.html
EARNINGS: Last week October
STATUS: Breakout test. BWLD surged higher two weeks back on the bailout news, clearing a 16 month cup with handle. As with many stocks after the surge it tested back. It has moved laterally the past week, closing at the 18 day EMA as it trades laterally in that range. Very solid action, holding solid in a weak market. Money flow is surging higher. After this test we are looking for a strong break higher.
Volume: 275.418K Avg Volume: 658.114K
BUY POINT: $41.05 Volume=950K Target=$47.31 Stop=$38.18
POSITION: BQU LH - Dec. $40c (60 delta) &/or Stock
http://www.investmenthouse.com/cd/bwld.html
Play Date: 10/01/2008
CME (Chicago Merchantile Exchange--$397.75; +26.24; optionable)
http://biz.yahoo.com/p/c/cme.html
EARNINGS: 10-29-08
STATUS: Trend reversal. Looking back at CME as it bounces right back from the Monday selling, holding the trend break and looking for some upside. CME peaked a long run in December and trended lower through July. A lateral, very flat move in August through the first three weeks in September, and then a gap higher over the trendline. It has tested and held, and is in great position to move higher from here.
Volume: 976.509K Avg Volume: 1.405M
BUY POINT: $400.31 Volume=1.8M Target=$448.00 Stop=$391.88
POSITION: CME KT - Nov. $400c (55 delta)
http://www.investmenthouse.com/ci/cme.html
Play Date: 10/01/2008
THS (TreeHouse Foods--$30.30; +0.60; optionable): Processed and packaged foods
http://biz.yahoo.com/p/t/ths.html
EARNINGS: 11-3-08
STATUS: Ascending base. Nice strong volume Wednesday as THS broke higher over resistance at 30, clearing its 8 week base. Part of a larger 24 month base and this breakout is actually a breakout from the big pattern as well. Strong money flow is leading the way higher and THS is following it on the move. Very solid.
Volume: 462.938K Avg Volume: 340.669K
BUY POINT: $30.48 Volume=475K Target=$35.00 Stop=$28.89
POSITION: THS KF - Nov. $30c (59 delta) &/or Stock
http://www.investmenthouse.com/ci/ths.html
Downside: Have to be ready for the downside as well as you just don't know how the market will respond to the bailout and after.
Play Date: 10/01/2008
EEV (UltraShort Emerging Markets ETF--$98.19; +1.14; optionable)
STATUS: EEV is the upside vehicle for shorting the emerging markets. It is testing the 50 day EMA as it rests and consolidates after a volatile decline on the announcement of a bailout plan in the works a couple of weeks back. It made us a ton of money before that on the September run. Going to be patient
Volume: 1.63M Avg Volume: 1.315M
BUY POINT: $103.11 Volume=1.8M Target=$120.00 Stop=$98.21
POSITION: FEJ KT - Nov. $100c (55 delta) &/or Stock
http://www.investmenthouse.com/ci/eev.html
Play Date: 10/01/2008
SDS (UltraShort S&P500 ETF--$69.77; -0.53; optionable)
http://biz.yahoo.com/p/s/sds.html
STATUS: Upside version of playing the SP500 downside. SP500 rebounded after the Monday meltdown. It held its ground Wednesday. That can be good if it is a prelude to a follow through. If the bailout hits a snag or even not it could still stall out and turn back down; it may be trying to follow DJ30 and its possible double bottom, but there is a long way to go still.
Volume: 39.24M Avg Volume: 28.825M
BUY POINT: $70.88 Volume=40M Target=$78.95 Stop=$68.11
POSITION: SDS KR - Nov. $70c (56 delta) &/or Stock
http://www.investmenthouse.com/ci/sds.html
Will send flower later since I don't have much experience now.
