主题：02/27/2009 Market View -- 宁子

SUMMARY:

- Some economic data breaks the string of worsening results, but market does not.

- Q4 GDP revision tanks further, Q1 to be worse.

- Chicago PMI, Michigan sentiment post modest improvement after, starting the watch for others to show the same.

- Credit markets, having thawed post TALF, freeze once more on fiscal initiatives.

- Market on the ropes looks to NASDAQ to save it but it will take more time with this break of support.

Tuesday rally attempt fails on Friday.

Friday was the first day the Tuesday rally attempt could look for a follow through session, i.e. another strong upside session to show buyers were still interested.

It had its work cut out. GDP was nothing short of hideous. Michigan sentiment and Chicago PMI bettered expectations by a tad, stemming the negative tide of the past few weeks, but just a bit. The economic data is bad, but that is not the real issue. That the data is bad is no surprise. The market is not tanking when it hears bad economic news. It has not tanked all during the consolidation on really bad economic data. As the indices came off the November low that was the strength: taking all the bad economic news thrown at them and still moving higher.

The problem now is the next set of events supposed to help cure the prior problems. The stimulus package, the bank plan (or the lack thereof), higher taxes proposed as of October 2009, and a budget and policies (e.g. nationalized healthcare, trade restrictions, cap and trade, carbon limits) hostile to those that make the jobs and pay the majority of the taxes even before the hikes to come. Who knew that $40M to remodel the Agriculture Department headquarters, Depression-era trade policies, nationalized healthcare, and thousands of pet projects are the cure to the frozen credit markets? Dick Morris calls it a war on prosperity. No, it is a war on our Constitution and our progeny.

THAT is what is now weighing on the market. The credit markets froze again in response. Friday on the heels of the budget release the market opened sharply lower, tried to rally, but we didn't think it would hold and it did not. Friday was a microcosm of the entire week: a weaker open Monday, a bounce attempt, then failure and new lows. We used Friday to buy some downside positions in anticipation of some more weakness to start next week.

TECHNICAL. Intraday it looked as if something could be brewing. A lower start then a move from negative to positive, but it could not hold. The indices closed not at session lows but given they started below key support levels, the late fade put them back below support at the close. New bear market lows for SP500 and DJ30. A new closing low for SP600. NASDAQ fell below its December lows.

INTERNALS. Breadth was nothing, at least compared to what it has shown on the wilder sessions of the week. Volume surged on NYSE as Citi traded 1.8B shares, over 7 times its average trade that has, of course, been on the rise since late November as it has been effectively liquidated since. NASDAQ volume was not up as much, but it was no slouch, posting the strongest advance of the week as NASDAQ gapped to a new post-November low then failed an attempt to recover. New lows were on the rise, but as with Monday the numbers were quite mild, coming in at the 300 range. That is impressive and a positive as new lows are a measure of the strength of selling. If most stocks refuse to hit new lows as the market revisits prior lows that indicates fewer stocks participating in the downside (meaning they are building bases), and thus the downside chokes itself off from lack of fuel.

CHARTS. New bear market lows on SP500 and DJ30, and they did it on some volume as the financials suffered piling on. That indicates more dumping of shares and dumping often begets more dumping. Still looking at those new lows, however. Don't want to forget that as the markets struggle into next week. SP500 hit a new bear market low after almost 5 months of consolidating. A break of a prior low often leads to a fairly quick drop after the breach and then a pretty quick test as well. NASDAQ broke its December low for the second time on the week. This action by both breaks the rally attempt on Tuesday. The downside door is open for techs, and with SP500 falling below its November low NASDAQ, with its umbrella-like pattern is very much in position to make the November low test itself. That will be the real test for the market and this 5 month consolidation attempt the formed following the LEH failure. We need to keep in mind that support levels are spongy and that the breaks by SP500 and NASDAQ are not massive. Thus even SP500 is not irreparably harmed by a modest new bear market low. It is not basking in the warm sun, but it is not a total collapse at all.

LEADERSHIP. This is just what the market needs to find. The problem with leadership is that it depends upon an assessment of the economic future. Over the past three weeks leadership by techs, chips, metals, energy and other sectors that could be touched by the at the time potential stimulus to come and an effective bank bailout has been splintered. The selling broke down many groups and the modest bounce Tuesday and the inability to drive higher after that set up some more downside. Some chips remain in good shape (MRVL, XLNX) and some consumer retail surprisingly remains solid (AMZN, TJX). On the other hand metals are down, most energy, and lots of tech have broken down. As NASDAQ tests its lows these groups or new groups need to hold and base out. Again the modest rise in new lows on this test needs to be kept in mind.

Credit becomes even harder to come by. A history lesson for Congress and the administration.

I never thought I would see this kind of economic calamity and especially this kind of flatly wrong response to it again in my lifetime. I lived through the 1970's and the mistakes made and the economic pain that followed. While I would like to blame disco for all of the 1970's problems, it was but a symptom of how sick things were.

Every child always asks why is history important. The trite but true (albeit incomplete) answer is you have to learn from the mistakes and the successes of the past. What time has proved to me (and I guess that means history) is that adults should be required to take refresher courses because we don't put the kids in charge of making key economic and policy decisions.

The 1960's and the 'war on poverty' saw unprecedented government programs and spending aimed at righting the ills of the country. History. Seems there should be a little more Bible reading as Jesus himself said we cannot cure the world's ills and injustices. He was talking about you and me; he didn't even bother to go into government. It was a given that the government was the last place to turn to. Nonetheless we embarked upon it and that turned the Kennedy boom into recession.

Then we had the Nixon years where a supposed conservative embarked upon both liberal and conservative ventures, took us off the gold standard, froze wages, and generally rocked the economic world as much as the sixties rocked the social order. Notice the similarity to the Bush 2 era? Bush espoused conservative views and even some conservative policies, but then he would embark on huge government growth exercises such as Medicare part D. As I told my senators at the time, if President Clinton had proposed it they would have voted it down as a tax and spend government expansion. The result when you mix policies this way is a volatile and explosive gamble and it ended badly for Nixon and for Bush (and hence all of us).

Carter came in and controlled speed limits, initiated 'windfall profits,' raised taxes, gave away strategic areas (Panama Canal), turned his back on our only Middle Eastern ally, bankrupted the military, wore cardigans as he told us we were wasteful gluttonous bullies. Interest rates at 20%, double digit inflation, terrible jobs market. The birthplace of 'stagflation.' Those were great times. At least we could console ourselves listening to disco.

Reagan came in with the anti-Carter message, i.e. that the US was great and that we could be great again. He had a clear plan to cut taxes, provide incentives to invest in the US, and shrink government. The air traffic controllers did not like his policies and went on strike. He fired them all. He unleashed our economic power. Tax revenues surged to unbelievable levels as the economy exploded higher. Then he, along with Congress, spent every dollar and then some. Reagan's goal was to rev up the US economy and outspend the USSR in an arms race. It worked. Problem is, after we won Congress did not quit spending and with the boom that followed things would have been great but for Congress spending on even more programs without cutting any.

We are now in a 1970's like era. The Bush/Nixon connection that mixed principles and loused things up followed by the Jimmy Carter/Obama era that drives the stake home. There are ashes of socialism and communism dotting history's burn piles. Europe is more socialist than capitalist, and if it has 1% GDP growth its central banks get all nervous and want to raise interest rates to control the 'hot' economy. And we want to move to that model and guarantee mediocrity? Not for my kids, no thank you.

That is, however, the path we are being forced to follow as this crisis is used to pass legislation that pushes a strong socialist agenda, legislation that the democrats openly admit would never pass during normal times. The words of the Obama Chief of Staff continue to haunt us: 'don't let any good crisis pass without using it to pass what you could not otherwise pass.' 8,000 earmarks in the new budget but Obama doesn't oppose those because they were put in before he was President and so apparently they are sacred. It is business as usual. It is history as usual. We have learned nothing.

What about the credit? This is exactly about the credit crisis, not to mention many other issues that arise from these policies. TARP and $4T in guarantees from the Fed helped start the credit thaw. Gains stalled and started to reverse, however, as TARP funds were redirected from the original plan. It took the Fed coming out with TALF, the facility to purchase and trade consumer loans and small business loans, to get credit markets on the mend again.

Immediately after TALF was announced Dollar LIBOR rates started back down and sharply so. The gains were across the board and the key 3-month rate was poised to fall below 1%, a key, key break. Then things changed. The plans of the new Administration on the stimulus started to shape up and they were not stimulus. Rates started to creep higher. The bank bailout announcement came and went with no plan announced. More creep. Then the speeches about taxes, social policy, nationalizing healthcare. Then the budget release crystallized how pervasive the planned Dick Morris' war on prosperity is. LIBOR rates have exploded. Friday the overnight rate that was close to 0.10% prior to the stimulus bill shaping up, closed at 0.36% Friday, spiking from 0.28% overnight. The one-month has more than doubled from its low. The key 3-month is up to 1.26% after almost breaking 1%. These are huge moves for these rates and the cause and effect is pretty clear when you look, to the day, when the nice, steady declines stopped then started to reverse. Now, as in the seventies when interest rates were at 20%, you cannot get the money you need to operate. In the seventies no one was going to pay those interest rates, if they could qualify, for taking a risk in starting a new business given the terrible non-growth in the economy. Right now you simply cannot get the credit because no banks can afford the risk to lend the money and not have it paid back. This is leading to the no growth scenario of the seventies only with a deflation scare versus inflation. For now it is more than no growth; it is negative growth as the economy contracts violently in response to the lack of credit and now to policies that are anti-growth.But inflation is not out of the picture. There is massive money printing ongoing. The numbers we are accumulating in paper debt are incomprehensible to us. We simply cannot grasp how much money is being printed in order to try and inflate our way out of trouble. Unfortunately the spending gambit will fail to have the desired affect and thus we will have stagnation that won't be able to soak up all of those dollars with growth. That means a return of inflation as huge amounts of money chases the few goods a stagnant economy produces. It won't take much to turn from a worry of deflation to screaming inflation.

Again, I never thought we would see these types of economic problems again in my lifetime, but you could see it happening with a larger and larger government trying to control more and more of the economy and our lives. Bad policies were forced down the pipe such as the banks forced to lend to people who could never honestly begin to pay the money back. Interest rates were too low for too long and that further fueled the housing problems. What the government has not learned is that when you shove a lot of money into an area, the money sharks swarm and do whatever it takes to soak up all of those federal dollars. They are in it for the money alone and they work it hard until things start to dry up and then they are gone, leaving us to clean up the mess. Too much micromanaging and things always backfire. That is sadly another history lesson forgotten.

VIX: 46.35; +1.69

VXN: 45.28; +1.41

VXO: 49.08; +2.52

Put/Call Ratio (CBOE): 0.98; +0.3. Right back up after my Thursday comments about low the ratio dropped.

NASDAQ

Stats: -13.63 points (+0.98%) to close at 1377.84

Volume: 2.518B (+7.13%)

Up Volume: 907.702M (+317.874M)

Down Volume: 1.491B (-237.823M)

A/D and Hi/Lo: Decliners led 1.61 to 1

Previous Session: Decliners led 1.58 to 1

New Highs: 4 (+4)

New Lows: 336 (+112)

NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg

Gapped lower below the December lows. Rallied back up to the December low but could not hold the move, fading back to close at the new post-November low. NASDAQ has cracked that support and as noted earlier in the week, that leaves the door open to the November lows. Support and resistance are flexible, however. They do not shatter when bumped or slightly passed. They do if there is a massive explosion through them, but that is not the case here. Thus NASDAQ could hold here, recover the December lows, and never look back. It has also closed the late November gap higher so that is out of the way. Can bounce, but in reality it will likely need to test the November low while SP500 falls further below its November low.

SOX (-1.10%) held up decently, but it gapped lower, rallied to tap the 10 day EMA and then faded back to close. Still showing a lower high below the 50 day EMA and the candlestick chart pattern from Wednesday to Thursday shows a 'dark cloud' and that is a pretty reliable indicator for a near term bearish move.

NASDAQ 100 CHART: http://investmenthouse.com/ihmedia/NASDAQ100.jpeg

SOX CHART: http://investmenthouse.com/ihmedia/SOX.jpeg

SP500/NYSE

Stats: -17.74 points (+2.36%) to close at 735.09

NYSE Volume: 2.144B (+44.06%). Big blast higher compliments of C.

Up Volume: 502.826M (-138.477M)

Down Volume: 1.735B (+899.388M)

A/D and Hi/Lo: Decliners led 2.24 to 1

Previous Session: Decliners led 1.18 to 1

New Highs: 4 (+2)

New Lows: 292 (+132). Still impressively low on a new SP500 bear market price low.

SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg

A new bear market low for SP500. Not a major crash through that level so, as noted earlier, SP500 can still make a stand in this general area. It can but thus far there have been 9 down sessions in the past 10. If anything there is an oversold bounce but a break of key support often leads to a quick run lower before a quick rebound to test. Not expecting SP500 to suddenly turn and blast into a new rally, but instead NASDAQ comes down and tests its November low while SP500 tries to get back on its feet. That may take a drop down near 675, dome highs from 1996 to find those feet.

SP600 (-0.82%) gapped lower below the November closing low then rallied back. Couldn't hold it and faded to the open. New closing low for the bear market though not a new low. Hardly a pillar of strength even though it is still in the consolidation for practical purposes. At the lick log for this consolidation and it is trying to make a stand at that prior low. Said it many times before: small caps are economically sensitive and they are showing no sign of and economic pickup.

DJ30

New bear market low as the Dow slipped further lower below its 10 day EMA (7377), the near resistance. In an established downtrend and thus the 10 day EMA is acting as resistance as it moves lower and makes the occasional bounce higher. Not much use in looking for leadership from this puppy, at least not to the upside. The Dow is now at the early 1997 peak, but a slip lower toward 6350 in this renewed downtrend is likely.

Stats: -119.15 points (+1.66%) to close at 7062.93

Volume: 667M Friday versus 321M shares Thursday.

DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg

The market could not rally Friday as the shorts found no reason to recover what with the policy assault on the week. Seems they are not too worried about any weekend announcement as nothing will really trump the rhetoric and the hostile budget from last week.

We moved into some more downside positions on the session to play some more potential weakness to start the week. The past two weeks opened negative, and with the indices unable to hold a rebound Friday and trading below their key support, a quick run lower it quite likely before they try another bounce.

Bigger picture NASDAQ remains in its consolidation though its pattern (a broad top in the consolidation) indicates a decline to test the November lows. No problem with that at this stage of the game given all that has transpired. NASDAQ stocks have to set up and base again before they really move higher and a test lower by NASDAQ provides time to make those bases. When the indices made this last decline they were basically saying more time would be required even if this is the consolidation that sets a bottom.

So right now we are playing for that NASDAQ test of its November low and general weakness in the other indices as well. Then we see what kind of bounce is generated, the first after the current test lower and the second after NASDAQ makes it to the November low.

This could be short circuited if some better news comes out about the announced fiscal and policy announcements. There are some key democrats making modest statements and hinting there is overreaching taking place, pretty major complaining given the President's popularity. But the polls show his popularity just slipped below that of Bush during Bush's first month in office; yes they keep that statistic. The polls also show that while Obama remains popular, his policies are not nearly as popular. Some mitigating statements might take some sting off from the week, but we doubt that any such comments will come soon. Obama just laid out his entire agenda for his term, and as his chief of staff stated last October, he is using the economic crisis to get it all in fast. This overreaching could backfire. That is all down the road, however.

For now we look for a drop early in the week, see if there are some other downside positions we can get in on, then if the drop comes we take the gain, button up the plays. While the decline continues we watch for the stocks that hold support and maintain decent patterns. If we get some really solid stocks and names holding up, we play them on a bounce back up. We are in a new phase of trying to set a bottom and as noted above, that means more time to set back up and try again for another move higher. The economic news is no longer upsetting the market, but the policy response is, and that is the sticking point for any move higher right now. Frankly, the market is showing remarkable strength in the face of comments and proposals that directly attack what our financial and economic system is used to. Some say that being more like Europe is not that bad. To that I respond, but we broke away from Europe over 200 years ago to do it our way. What way has worked best? The answer is clear.

Support and Resistance

NASDAQ: Closed at 1377.84

Resistance:

1387 is the 2001 low

1398 is the early December 2008 low

1428 is the mid-November 2008 low

1434 is the January low (1440.86 closing)

The 10 day EMA at 1434

1460 is the February low

1493 is the October 2008 low & late December 2008 consolidation low.

The 50 day EMA at 1516

The 50 day SMA at 1520

1521 is the late 2002 peak following the bounce off the bear market low

1536 is the late November 2008 peak

The 90 day SMA at 1537

1542 is the early October 2008 low

1565 is the second low in October 2008

1569 is the late January 2009 peak

1603 is the December peak

1620 from the early 2001 low

1644 from August 2003

1666 is the January 2009 peak

1752 from 2004

1782 from August 2004

1786 is the November 2008 high. Key level.

Support:

1316 is the November 2008 closing low

1295 is the November 2008 low

S&P 500: Closed at 735.09

Resistance:

741 is the November 2008 intraday low

752 is the November 2008 closing low

768 is the 2002 bear market low

The 10 day EMA at 772

The 18 day EMA at 792

800 is the March 2003 post bottom low

804 is the low on the January 2009 selloff

812 is the February low

815 is the early December 2008 low

818 is the early November 2008 low

The 50 day EMA at 838

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

The 90 day SMA at 866

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:

722 is a December 1996 low

673 is a June 1996 peak

Dow: Closed at 7062.93

Resistance:

7197 is the intraday low from October 2002 bear market

7282 is the October 2002 closing low in the prior bear market.

The 10 day EMA at 7377

7449 is the November 2008 low

7524 is the March 2002 low to test the move off the October 2002 low

7694 is the February intraday low

7702 is the July 2002 low

7867 is the early February low

7882 is the early October 2008 intraday low. Key level to watch.

7909 is the early January low

7965 is the mid-November 2008 interim intraday low.

The 50 day EMA at 8060

8141 is the early December low

8175 is the October 2008 closing low. Key level to watch.

8197 was the second October 2008 low

The 90 day SMA at 8394

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:

7008 from February 1997 closing peak

6489 from December 1996 closing peak

Economic Calendar

These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.

March 2 - Monday

January Personal Income (8:30): -0.2% expected, -0.2% prior

Personal Spending, January (8:30): 0.4% expected, -1.0% prior

Core PCE, January (8:30): 0.1% expected, 0.0% prior

Construction Spending, January (10:00): -1.5% expected, -1.4% prior

ISM Index, February (10:00): 34.0 expected, 35.6 prior

March 3 - Tuesday

January Pending Home Sales (10:00): -3.0% expected, 6.3% prior

March 4 - Wednesday

February ADP Employment Change (8:15): -613K expected, -522K prior

ISM Services, February (10:00): 41.3 expected, 42.0 prior

Crude Oil Inventories, 2/27 (10:30): 717K prior

March 5 - Thursday

Q4 Productivity-Rev. (8:30): 1.6% expected, 3.2% prior

Unit Labor Costs, Q4 (8:30): 3.4% expected, 1.8% prior

Factor Orders, January (10:00): -2.1% expected, -3.9% prior

March 6 - Friday

February Average Workweek (8:30): 33.3 expected, 33.3 prior

Hourly Earnings, February (8:30): 0.3% expected, 0.3% prior

Nonfarm Payrolls, February (8:30): -615K expected, -598K prior

Unemployment Rate, February (8:30): 7.9% expected, 7.6% prior

Consumer Credit, January (14:00): -$4.0B expected, -6.6B prior

A mix upside and downside for the week ahead.

Upside:

Play Date: 02/28/2009

DLTR (Dollar Tree--$38.82; +1.76; optionable): Discount variety stores

http://biz.yahoo.com/p/d/dltr.html

After Hours: $38.81

STATUS: Rebound. Earnings hurt DLTR to start February, breaking down from an attempt at a new high. It tested and then started back up with a strong surge, gaining strength as the week ended, clearing the 200 day SMA (37.84) on the strongest volume yet. Looking to play DLTR on a continue move to fill the gap and try that old high.

Volume: 5.199M Avg Volume: 2.583M

BUY POINT: $39.25 Volume=4M Target=$43.94 Stop=$37.77

POSITION: DQO EU - May $37.50c (63 delta) &/or Stock

http://www.investmenthouse.com/cd/dltr.html

Play Date: 02/28/2009

RIG (Transocean--$59.77; +0.01; optionable): Drilling rigs for offshore oil work.

http://biz.yahoo.com/p/r/rig.html

After Hours: $60.04

STATUS: Flat base. After the selloff RIG put in an 8 week bottoming patter, and broke higher the first week of February, clearing that initial base. It rallied up to the 90 day SMA (59.47) and has slide laterally in a rather flat trading range on low volume. The past two sessions it moved through the 90 day but could not hold the move, closing just below that level. Looking for a breakout on strong volume to show us it is time to buy.

Volume: 8.893M Avg Volume: 10.865M

BUY POINT: $61.65 Volume=13M Target=$69.94 Stop=$57.77

POSITION: RKJ EL - May $60c (52 delta) &/or Stock

http://www.investmenthouse.com/ci/rig.html

Play Date: 02/28/2009

STAR (Starent Networks--$15.81; +0.17; optionable): PC networking and communications hardware

http://biz.yahoo.com/p/s/star.html

After Hours: $15.83

STATUS: Breakout test. An emerging leader in the market, STAR broke form a 9 month cup with handle base on Wednesday, surging on very strong volume. It tested Friday, tapping at the 10 day EMA (14.93) on the low and rebounding positive. Strong action in a weak market and that has us ready to move in this week as STAR shoots higher.

Volume: 1.704M Avg Volume: 725.768K

BUY POINT: $15.96 Volume=1.1M Target=$19.25 Stop=$14.84

POSITION: QTQ FC - June $15c (64 delta) &/or Stock

http://www.investmenthouse.com/ci/star.html

Play Date: 02/28/2009

TJX (TJ Max--$22.27; -0.21; optionable): Discount department store

http://biz.yahoo.com/p/t/tjx.html

After Hours: $22.28

STATUS: Test breakout. A nine week base yielded to a sharp break higher to start February. TJX rallied up to next resistance at the 90 day SMA (21.61) then tested the next three weeks, holding support at the 50 day SMA (20.84). Wednesday TJX gapped higher over the 90 day and then spent Thursday and Friday testing. Nice test, holding right on top of the 90 day SMA. After this pause we are looking to move in as TJX moves back up. Surprisingly solid pattern that we are looking to make a trade on.

Volume: 6.661M Avg Volume: 5.792M

BUY POINT: $22.55 Volume=7M Target=$26.95 Stop=$21.55

POSITION: TJX DX - Apr. $22.50c (52 delta) &/or Stock

http://www.investmenthouse.com/ci/tjx.html

Downside:

Play Date: 02/28/2009

CERN (Cerner--$36.60; -0.12; optionable): Healthcare information software

http://biz.yahoo.com/p/c/cern.html

After Hours: $36.59

STATUS: Put. You would expect CERN to perform better with the ambitious record transfer process but it is not one of the chosen as of yet. Thus it is struggling still in its 5 month trading range, just coming off a test of the peak but making a lower high as it did. It fell through a swath of support such as the 50 day EMA and 90 day SMA last week but did not break down. If it follows the short term indicators lower and breaks down to start the week we are looking to move in and ride it down to near the early February low. That move lands us a 50%ish gain.

Volume: 1.076M Avg Volume: 1.396M

BUY POINT: $36.31 Volume=1.5M Target=$34.22 Stop=$37.15

POSITION: CQN OT - Mar. $37.50p (-55 delta)

http://www.investmenthouse.com/ci/cern.html

Play Date: 02/28/2009

CPNO (Copano Energy--$14.22; -0.06; optionable): Oil and gas pipelines

http://biz.yahoo.com/p/c/cpno.html

STATUS: Put. CPNO sold off hard two weeks back then spent last week recovering, moving back up to bump the 50 day EMA (14.55) and stall out. The short term indicators are setting up for a bearish break lower, matching up with the technical pattern of a lower high below resistance, something of a right shoulder to a head and shoulders. On a break lower we move in and ride it to the target for a 42%ish gain. We are waiting for a break below the 50 day SMA (13.67) but the aggressive can move in below 14.

Volume: 232.615K Avg Volume: 405.705K

BUY POINT: $13.55 Volume=415K Target=$11.52 Stop=$14.65

POSITION: CQC QC - May $17.50p (-50 delta)

http://www.investmenthouse.com/ci/cpno.html

Play Date: 02/28/2009

QID (QQQ Proshares UltraShort ETF--$62.65; +1.23; optionable)

STATUS: NASDAQ broke below its December low Friday, and that opens the door to the November low. We are looking to enter as NASDAQ continues lower and ride the move to the test. Likely a bit choppy on a move lower but expecting NASDAQ to be drawn to that level.

Volume: 27.131M Avg Volume: 22.5M

BUY POINT: $62.88 Volume=25M Target=$69.45 Stop=$60.97

POSITION: QID CJ - Mar. $60c (57 delta) &/or Stock

http://www.investmenthouse.com/ci/qid.html

Play Date: 02/26/2009

AKAM (Akami Technologies--$18.09; +0.03; optionable): Helps make the internet the internet

http://biz.yahoo.com/p/a/akam.html

After Hours: $18.44

EARNINGS: Announced 2-4-09

STATUS: Flat base. Tested a bit more Friday, holding the 10 day EMA (17.60) on the low and bouncing. Good test seeing up the break higher. To recap: Broke higher to start February, riding the strong earnings report to clear a 5 week cup base. A short move and then a three week lateral walk as the market sold back. During that time AKAM moved laterally over the 10 day EMA. Volume started to jump on the upside sessions the past two weeks even as the overall market sold. Started the next break higher Wednesday but then faded Thursday as trade contracted as the overall market reversed. Still in good position and ready to move in as AKAM makes the next break higher and runs toward its 200 day SMA (21.45) as our initial target.

Volume: 5.201M Avg Volume: 4.647M

BUY POINT: $18.48 Volume=6.5M Target=$21.25 Stop=$17.32

POSITION: UMU EW - May $17.50c (61 delta) &/or Stock

http://www.investmenthouse.com/ci/akam.html

Play Date: 02/23/2009

AMZN (Amazon.com--$64.79; +2.45; optionable): Internet retail

http://biz.yahoo.com/p/a/amzn.html

EARNINGS: Announced 1-29-09

STATUS: Test breakout. Volume jumped Friday as AMZN jumped back up to the 200 day SMA (65.11). Retail is surprisingly strong and looking for the breakout over the 200 day to give us the buy. To recap: AMZN formed something of a reverse head and shoulders off the bottom of the selloff. It was fading back when earnings hit and AMZN gapped higher to end January, rallying on up to the 200 day SMA. It has tested back the past two weeks with the market, coming back to near support at the 18 day EMA (60.90) on mostly lower volume. Strong money flow is leading higher and we will see if AMZN holds the lateral consolidation and then makes the break over the 200 day on a good jump in volume. If it does we move in; AMZN has held up very well in the market weakness.

Volume: 11.489M Avg Volume: 9.717M

BUY POINT: $65.45 Volume=12M Target=$74.95 Stop=$63.11

POSITION: ZQN GO - July $65c (75 delta) &/or Stock

http://www.investmenthouse.com/ci/amzn.html

Play Date: 02/24/2009

ASIA (Asiainfo Hldgs--$12.21; +0.07; optionable): Chinese security software

http://biz.yahoo.com/p/a/asia.html

After Hours: $12.20

EARNINGS: 2-12-09

STATUS: Cup w/handle. Very low volume as ASIA sets a very nice handle at the 10 day EMA (12.11). Looks to be a solid test and now we just wait for ASIA to make the break higher. a breakout is over 13 but the aggressive can move in at 12.55. To recap: ASIA has worked on its handle the past 2 weeks, fading back to the 10 day EMA near support on lighter trade; very good handle consolidation action in the 10 week base. The pattern over the past 9 months has been volatile at best, but it did make a low in October and has built a series of higher lows, the latest being the current pattern. Friday ASIA gapped lower but held support at 12 as well as above the 200 day SMA (11.53) it broke over on the surge higher just over a week back. May do a bit more testing of the rising 10 day EMA, but money flow is jumping and ASIA bounced nicely last Friday and then again Tuesday after it sold but held the near support Monday. Getting ready to make the break now.

Volume: 277.556K Avg Volume: 382.84K

BUY POINT: Breakout: $13.08 Aggressive: 12.55 Volume=500K Target=$15.75 Stop=$12.16

POSITION: EUJ GV - July $12.50c (70 delta) &/or Stock

http://www.investmenthouse.com/cd/asia.html

Play Date: 02/11/2009

MOS (Mosaic Company--$43.05; +3.39; optionable): Ag chemicals

http://biz.yahoo.com/p/m/mos.html

After Hours: $43.05

EARNINGS: Announced January 5

STATUS: Test 50 day EMA. Volume started to surge last week. At first it was downside but then MOS turned it around, surging higher Friday on the strongest trade of the week as MOS jumped off the 50 day EMA (38.86). After the 4 month lateral, flat base MOS broke higher to start February and is testing with the current pattern that is holding over that prior base. Excellent action.

Volume: 18.507M Avg Volume: 8.097M

BUY POINT: $43.11 Volume=13M Target=$68.88 Stop=$40.09

POSITION: MOS FH - June $40c (62 delta) &/or Stock

http://www.investmenthouse.com/ci/mos.html

Play Date: 02/24/2009

V (Visa, Inc.--$56.71; +0.65; optionable): Consumer credit services

http://biz.yahoo.com/p/v/v.html

EARNINGS: Announced 2-4-09

STATUS: Reverse head and shoulders. Good volume, nice price action Friday though V closed well off the high. Solid, looking for the breakout this week as money flow shoots higher. To recap: Same story, i.e. selling off though V started in June. Bottomed October through December, but was not done. One more dive in January took V to new bear market lows. It recovered, however, and spent the past 2.5 weeks moving laterally on the 10 day EMA (54.87), consolidating the rally off the lows. In so doing V has formed an 11 week reverse head and shoulders though it has flat shoulders. That is okay; shows good accumulation as no one wants to let go of it. Good upside volume the past week as V moved through the June to September down trendline. Looks solid for a break higher out of this pattern and a run toward the 200 day SMA (64.08).

Volume: 11.81M Avg Volume: 7.835M

BUY POINT: $57.11 Volume=10M Target=$64.00 Stop=$53.48

POSITION: V FK - June $55c (55 delta) &/or Stock

http://www.investmenthouse.com/cd/v.html