主题：03/18/2009 Market View -- 宁子

SUMMARY:

- Market shows resilience ahead of FOMC, then shows a follow through session.

- Bernanke to spend another $1.1T on direct treasuries purchases, expanded TALF, mortgage backed securities: 'no bank will fail and a 4% mortgage in every pot' New Deal.

- Market shows a follow through with that Fed assist.

- Finally figured out how the stimulus plan will work.

- ORCL earnings ramp up some more excitement as shorts will have to cover more.

Fed fears a second Great Depression, launches another 1.1T and the kitchen sink at the credit markets.

CPI (0.4% versus 0.3% expected), current account diving to -$132.8B, UK unemployment rising at its fastest rate since 1971, crude and gasoline inventories jumping (2M, 3.2M respectively). All were out early, all considered important, but all were nothing compared to the Fed and its historic announcement that it would actually, no kidding this time, buy treasuries. In prior times the Fed has mused publicly about buying treasuries but never actually got to the point where it said 'we are doing it' and set a number figure to it. Those days are gone.

Now we have a new "New Deal" with the motto 'no bank will fail and a 4% mortgage in every pot.' Bernanke announce an additional $1.1T in spending and facilities. $750B for mortgage backed securities and that is expected to drive mortgage rates down to 4% for everyone, not just those that are in over their heads for whatever reason. May not like the spending, but you have to like the attitude: we are all in this together and we all deserve a break. Another $100B for Agency debt (on top of the $100B already set aside). And then there is the $300B for the actual purchase of long term treasuries. Big intervention directly impacting bond yields.

Even before Bernanke the market showed great resilience after a slow start. It shook off the selling and started to move up ahead of the announcement with NASDAQ and SOX resuming leadership as they turned nicely positive. Then the Fed announcement hit and everything turned over. Stocks shot higher. Bond yields dove from notching cycle highs (1.03% on the 2 year down to 0.79% at the close; 3.02% on the 10 year to 2.50% on the close). The dollar was slammed (1.3485 euros). Gold shot higher on inflation fears (942.3, +25.5). Everything jerked the opposite direction it was going. Stocks rallied sharply, sending SP500 over 800 and NASDAQ over 1500. Then stocks gave all of the post-Fed move back. A bounce in the last half of the session recaptured half of the post-Fed gain. Very interesting action.

We took some more gain on the news, but with the shorts having to cover thanks to the Bernanke mortgage in every pot new deal there could be some more upside that drives SP500 to the 830ish key level and from there likely a pullback. It was ready to turn back at this level anyway but the Fed has changed the playing field some and the shorts feel the need to cover. Thus we can get some more upside out of this rally to that key resistance and then some kind of pullback.

TECHNICAL. As noted, the market was resilient before the Fed announcement, and that was a good sign of some underlying strength building. Then the surge on the news but also the giveaway of the gains. The point: not as strong as you would expect after such a Fed proclamation.

INTERNALS. The internals and the prices on SP500, NASDAQ, SP600 and SP400 were strong enough for a follow through with the 2% to 3.4% price gains. Sold 4:1 breadth on NYSE and 2.5:1 on NASDAQ. Volume surged on both NYSE and NASDAQ. Definitely follow through caliber . . . just as the indices reach some important resistance. It also occurred on the seventh day, and follow through sessions occurring before the seventh day are typically, and that is typically, stronger. Doesn't mean there is an automatic rally on from here or that resistance will win out. It tells us the market can continue to build for an upside move with more stocks forming bases even with a pullback from this resistance and we have to watch what happens now the Fed has tried to once again change the game.

CHARTS. Even with the push from the Fed it is key that SP500 could not push through 800 and hold it. Made it to 803, gave it back, then could not get back up even with the financials on a tear. Up and down after the Fed, unable to hold a move into resistance. NASDAQ hit 1507 on the high after moving through the 50 day EMA, but it too could not hold the move, giving the post-Fed move back and scratching to get some of it back before the close. This may not be the resistance that stops it (the next is 1600), but how it reacted in the post-Fed euphoria tells us it was not all flowers and candy. The sellers moved in at that point and fended off a rebound.

That said the move upside can continue as the shorts continue to cover their financial shorts, but unless the upside can show something more than Wednesday it can make the higher resistance points (830 on SP500) but those could still stop the move and at least send it back on a test. The Fed has made it more likely that any pullback will be a test versus a rollover to ugly selling as the Fed put something of a bid under financials and the market in general. How it acts at this resistance and if SP500 can even make 630 will tell a lot of the story.

LEADERSHIP. We were looking at some financials that were setting up but then the Fed shot them higher. As noted there could be more upside as short positions are covered, but some decent set ups such as on WFC were shot today. Now if SP500 cannot break 830 and fades then we could get some set ups here. The leaders of late were moving higher with chips moving up along with techs. Metals started to stir after the Fed; good volumes on PCU, RIO, FCX. Commodities may have had their fires lit. Retail is still looking good even for some new breakouts as with some techs and chips. More leadership is setting up as the market continues to move in the rebound, and a pullback will only enhance that action as long as it is just a pullback. Getting better, the leaders are leading even on soft days (techs and chips were out in front early), but there is still work to do overall. The follow through tells us to look for more base building as the market has more of a chance just to pullback on a test versus sell off hard so the outlook is at least better for leadership to develop.

Now we understand the grand plan of the stimulus, bonus hearings, etc.

Ever since we saw the final version of the stimulus package (and of course no one saw it until after it was passed) we pondered and wondered how, how in economic theory or history, would it act to rapidly stimulate the economy? Indeed, how would it do so over a longer period as well?

Then the events subsequent to passage started to unfold. The budget that would have no earmarks had 8,000, but then we find out that earmarks are not really bad, leaving us to wonder why promises were made to cut them out of the budget at all. Senator Schumer even derided those complaining of the $2B or so spent on those earmarks as chatter mongers getting in the way of progress. Strange indeed, but no stranger than the stimulus package.

Next there was the uproar over the $160M in bonuses paid to AIG personnel. Senator Schumer said Congress would tax 100% of the bonus; wow, what happened to equal protection under the law? Barney Frank demanded to have the names and addresses of everyone receiving a bonus. Well hello big brother. So vile was this subversion of the public trust that we had to have congressional hearings to root out the villains and, as one congresswoman said, tax the recipients 1,000% on any bonus received. Wow. For taking a contractual bonus promised to you if you stayed on to help clean up the horrible mess your predecessors created, a contract that the very congressmen railing on television KNEW about, you are treated worse than a drug dealer. Is this the US or the USSR?

$160M is no small amount, but when Congress protests so much over this when they pass trillions in spending without even reading the bills and then chides those complaining of a few billion in waste, you start to see the hypocrisy. You start to see that these hearings are a smoke screen, on our dollar of course, to divert attention to $160M versus the hundreds of billions being squandered and yoked directly to the necks of our children and grandchildren. With a 1.1T deficit, these bonuses are literally nothing.

The anger was swelling, I was reaching for my shoe, and then it hit me. The stimulus plan is not just what is called the stimulus plan. It is the combination of all of the actions taken by the Administration and Congress that are so offensive to our Constitution and form of government, that are so outrageously hypocritical (broken promises, passing hundred billion dollar legislation without reading it, thousands of earmarks when none were supposed to exist, overplayed indignation, affronting the Constitution, launching vendettas from the Capital building) that they evoke a desire to throw objects at our television sets, computers, or anything convenient.

Thus we will require hundreds of millions of new large screen televisions (no wonder they didn't delay implementation of the digital transmissions), computers, computer screens and the like. We will even need to replace what we threw at the object evoking our anger. The ensuing consumption binge will be enormous. How clever. How understanding of our government to bear the brunt of our anger yet do so knowing we are only helping ourselves. Now THAT is truly genius in governing.

MARKET SENTIMENT

VIX: 40.06; -0.74

VXN: 39.8; -0.56

VXO: 41.07; -0.55

Put/Call Ratio (CBOE): 0.65; -0.13

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: 26.4%. Down from 29.7% and at the lowest level since December 2008. Well down from 43.0%, the current 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: 47.2%. Bounced back up after slipping last week. this is the peak for the run this year but is still below the December and October peaks. 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, but as with bulls, still well below the level considered bearish for stocks. Bearishness hit a 5 year high at 54.4% the last week of October. 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: +29.11 points (+1.99%) to close at 1491.22

Volume: 2.827B (+34.28%)

Up Volume: 2.512B (+582.241M)

Down Volume: 271.118M (+111.835M)

A/D and Hi/Lo: Advancers led 2.49 to 1

Previous Session: Advancers led 2.83 to 1

New Highs: 16 (+11)

New Lows: 38 (-15)

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

All enough to show a follow through but we note that NASDAQ could not hold a move over 1500 level that represents a lot of highs and lows since October. A significant interim resistance level ahead of the December peaks and the February peak just over 1600. NASDAQ could travel to that next resistance level on this leg if the big techs and chips continue to rally. There are still many in position to move higher. The action after the Fed announcement was a warning flag so at this point we let positions ride higher if they will and then look for a test to really get a lot more active with more upside.

SOX (+3.45%) broke through 225 and rallied to the February highs intraday (231) before backing off modestly. That is the last resistance ahead of the November peak near 250. Chips are definitely leading and can put in more upside here before they turn back, but a lot depends upon just how spent the buyers are after this run. Again, the post-Fed action was not that strong and that keeps us watching the near term reaction.

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

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

SP500/NYSE

Stats: +16.23 points (+2.09%) to close at 794.35

NYSE Volume: 2.077B (+39.23%)

Up Volume: 1.856B (+503.632M)

Down Volume: 213.098M (+79.451M)

A/D and Hi/Lo: Advancers led 4.11 to 1

Previous Session: Advancers led 3.24 to 1

New Highs: 10 (+1)

New Lows: 72 (+7)

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

Impressive internals as the financials reversed post-Fed and really surged, bring SP500 from negative to positive. As discussed earlier, it moved into resistance just over 800, hit the 50 day SMA on the high (803) and then faded to close at the 50 day EMA. That keeps it below the January low and under a swath of resistance from 800 to 830ish, and then up at 870 to 875. Moved through the November low and the February failed consolidation and is at next resistance. If shorts cover more, SP500 goes up more given the high number of financials on this index. Big 20% move to this point and the action after the Fed was not that powerful. Not expecting a lot more upside before a test, but frankly with the government making proclamations you simply have to see hw the market treats it.

SP600 (+3.51%) continued its rally, moving up to the 50 day EMA and just below the December low. Strong move but it is following the rest of the market, though it will be interesting to see if SP600 strikes its own path now that the Fed took this action. Will the small caps give it a thumbs up and move to the leadership pack?

DJ30

The Dow rallied as neatly as possible to the November closing low (7522, 7571 on the intraday high Wednesday) and then faded back to close below that level. This is the Dow's first real resistance since tumbling below that level in February so it is an important test point. It is also joined by the 50 day EMA (7630) pushing down on it. Strong upside volume as the financials surged as shorts covered. It might push a bit higher toward 7500 and even 8000 where there is some serious resistance; unwinding short positions takes some time and tends to drive stocks over time. But for the Fed trying to change the game on Wednesday this would be a very good shorting point for the Dow. We will look at that just in case, but we want to see how the market reacts to the Wednesday move before getting in too deep into one side or the other.

Stats: +90.88 points (+1.23%) to close at 7486.58

Volume: 584M shares Wednesday versus 391M shares Tuesday. Big volume as the shorts covered their financial positions.

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

Jobless claims, Leading Economic Indicators, and Philly Fed PMI are out Thursday and the first and third will garner most attention. We are interested in Philly after the poor New York showing to start the week.

As with the economic data Wednesday, these reports are important, but the big cheese is still the Fed's action and whether the shorts feel obligated to cover or otherwise unwind their shorts or if they take the Fed's action is just another federal government attempt in a long list of attempts that have failed and figure a 20% rally on SP500 is enough to sell into.

Said it above, but after the Fed action more than usual for any Fed action, we have to see how the market reacts. The market is typically down right after an FOMC meeting, but this was no typical FOMC meeting. Shorts may want to cover some more. Then again, the market action after the FOMC announcement shows that the sellers sold into the euphoria. With SP500 still below 800 and NASDAQ below 1500 after both ventured into those areas intraday, the action was not an overwhelming affirmation of a further run higher.

Thus we have to keep our options open for new positions. Upside is a bit extended and riskier after such a solid move higher, but that doesn't mean the upside won't still come to the market even from here. We have upside in some interesting areas showing life that did not participate in the recent rally, e.g. metals and commodities. There are also some excellent techs and chips in position to lead the next wave higher. If they show strong gains and the market shows resilience again, then we can pick up some of those positions.

We also need to be looking for some downside. There are many stocks, including some of the indices, that have rallied back to key resistance, and if the Fed did not change the game and force more short covering, these should start to struggle here. SP500, DJ30, AAPL are a few examples. The question is, do you go ahead and jump in on them before you see the real impact of the Fed action? Tough call. We will look at some good set ups to the downside however, and if we get good moves we can look their way. Some stocks did not move well at all during the rally and are at resistance (e.g. OCR), and they can easily sell off on any weakness.

In sum, the Fed action is another government action trying to change the game for the markets. The post-FOMC action was not convincing it did that. How shorts respond over the next couple of sessions tells us more about how effective the Fed was in its attempt. It is expiration week and that makes reading the tea leaves even more difficult. Nonetheless, if some upside presents itself for good patterns, we will take it. If some downside presents itself, we will take it. In either case we will view the play as more short term until the market shows more direction, moving in, taking a gain, getting out of Dodge. As for existing positions we will let them run upside if the market shows continued resilience, but we have moved up the stops after taking some profits the past several days. If we get stopped out with a smaller gain on these remaining partial positions that is okay. We will get back in if the market shows us we should get back in.

Support and Resistance

NASDAQ: Closed at 1491.22

Resistance:

1493 is the October 2008 low & late December 2008 consolidation low. Cracking but not broken

The 90 day SMA at 1494

1505 is the late October 2008 closing low.

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

1536 is the late November 2008 peak

1542 is the early October 2008 low

1569 is the late January 2009 peak

1598 is the February 2009 peak, the last peak NASDAQ made

1603 is the December peak

1620 from the early 2001 low

1644 from August 2003

1666 is the January 2009 peak

Support:

The 50 day SMA at 1470

1460 is the February low

The 50 day EMA at 1460

1434 is the January low (1440.86 closing)

1428 is the mid-November 2008 low

The 18 day EMA at 1409

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 794.35

Resistance:

The 50 day EMA at 794

800 is the March 2003 post bottom low

The 50 day SMA is at 804 tapped on the Wednesday high.

805 is the low on the January 2009 selloff. KEY Level

815 is the early December 2008 low

818 is the early November 2008 low

The 90 day SMA at 836

839 is the early October 2008 low

848 is the October 2008 closing low

853 is the July 2002 low

857 is the December consolidation low

866 is the second October 2008 low

878 is the late January 2009 peak

889 is an interim 2002 peak

896 is the late November 2008 peak

899 is the early October closing low

919 is the early December peak

944 is the January 2009 high

Support:

768 is the 2002 bear market low

752 is the November 2008 closing low but it is not broken and done away with

The 18 day EMA at 751

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 7486.58

Resistance:

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

7552 is the November closing low. KEY Level.

The 50 day EMA at 7630

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 90 day SMA at 8103

8141 is the early December low

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

8197 was the second October 2008 low

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:

7449 is the November 2008 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

The 18 day EMA at 7191

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.

March 16 - Monday

March Empire Manufacturing (8:30): -38.23 actual versusl -32.0 expected, -34.65 prior

Net Long-Term TIC Flows, January (9:00): -43B actual versus $34.8B prior

Capacity Utilization, February (9:15): 70.9% actual versus 71.1% expected, 71.9% prior (revised from 72.0%)

Industrial Production, February (9:15): -1.4% actual versus -1.2% expected, -1.9% prior, revised from -1.8%

March 17 - Tuesday

February Building Permits (8:30): 547K actual versus 500K expected, 531K prior

Housing Starts, February (8:30): 583K actual versus 450K expected, 477K prior

Core PPI, February (8:30): 0.2% actual versus 0.1% expected, 0.4% prior

PPI, February (8:30): 0.1% actual versus 0.4% expected, 0.8% prior

March 18 - Wednesday

February Core CPI (8:30): 0.2% actual versus 0.1% expected, 0.2% prior

CPI, February (8:30): 0.4% actual versus 0.3% expected, 0.3% prior

Current Account Balance, Q4 (8:30): -$132.8B actual versus -$136.7B expected, -$1.81.3B prior

Crude Oil Inventories, 03/13 (10:30): +2M actual versus +749K prior

FOMC Rate Decision (14:15): No change in rates, big facilities announced.

近日的反弹，让我进入了一个焦虑期。总感觉还要有一轮大跌，这么一场轰轰烈烈的危机不能就这么完了。但是昨天美联储的举动，实在太大，可能会彻底改变局面。股版现在太冷清，而经济版又太宏观，兄的帖子现在是俺的主要参考。谢谢了。

感觉金融股还有一波大涨。今天JPM,BAC,WFC的资金净流入不寻常的大，估计庄家在趁低吸货。OE后可能会再次带着大盘往上蹿一下。我估摸，会涨到四月份OE前后。然后。。。跳水？

Upside: Some are still ready to make the break higher.

Play Date: 03/18/2009

EPIQ (Epiq Systems--$16.79; +0.57; optionable): Business software

http://biz.yahoo.com/p/e/epiq.html

After Hours: $16.79

EARNINGS: 02/24/2009

STATUS: Setting back up for us, forming a short ascending triangle the past six weeks, trying to shake off those prior highs in December and late January. Strong money flow is leading the way higher and it looks as if EPIQ is ready to resume its upside ways.

Volume: 413.406K Avg Volume: 351.984K

BUY POINT: $17.38 Volume=500K Target=$19.95 Stop=$16.16

POSITION: FQU GC - July $15c (70 delta, low OI) &/or Stock

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

Play Date: 03/18/2009

TSM (Taiwan Semiconductor--$9.08; +0.10; optionable): Semiconductor integrated circuits

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

After Hours: $9.20

EARNINGS: 01/22/2009

STATUS: Test breakout. TSM broke out from its 12 week ascending base last week, moving over the 200 day SMA (8.71) on some solid trade. Then it started to test early this week, coming back to the 200 day, then bouncing Tuesday and Wednesday after starting lower both days. Wednesday the volume kicked back in as TSM hit a new closing high on this move. Nice break, nice test, and looking to move in as TSM continues the breakout run.

Volume: 27.978M Avg Volume: 20.619M

BUY POINT: $9.19 Volume=35M Target=$10.96 Stop=$8.65

POSITION: TSM GU - July $7.50c (73 delta) &/or Stock

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

Play Date: 03/18/2009

USO (United States Oil Fund ETF--$29.61; +0.17; optionable)

After Hours: $29.80

STATUS: USO is working on an 11 week cup base that is setting up a trend reversal. It has worked laterally the past two weeks, bumping up at the 50 day EMA (29.74) the past two sessions. A break through that level reverses the trend. Want to see some strong volume on that break higher through the 50 day.

Volume: 26.512M Avg Volume: 36.005M

BUY POINT: $30.08 Volume=38M Target=$36.77 Stop=$28.18

POSITION: UBO GC - Julyu $29c (57 delta) &/or Stock

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

Downside:

Play Date: 03/18/2009

AAPL (Apple Computer--$101.52; +1.86; optionable): iPods

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

After Hours: $101.36

EARNINGS: 01/21/2009

STATUS: Rolling channel. Blasphemy to some to look at AAPL to the downside, but it has traded in this range up to 103 for almost 4 months. Maybe that is too long and this will be the breakout, but intraday it rallied to 103 and faded. After hours it was back at 103 on the ORCL earnings. The entire move has been on low volume, suggesting not a lot of buying and thus a roll back down. With the market dealing with the Fed, however, we need to be careful and not get a head fake early in the day. Indeed we could see AAPL move over 103 on Thursday and then gap back down Friday, a classic sign the range is going to push it back down. We will let it show us the move either way. A move to the target lands a 43%ish gain.

Volume: 28.436M Avg Volume: 28.128M

BUY POINT: $99.66 Volume=30M Target=$94.55 Stop=$102.11

POSITION: QAA PT - Apr. $100p (-41 delta)

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

Play Date: 03/18/2009

CPLA (Capella Education--$49.23; -1.11; optionable): Education and training

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

After Hours: $50.30

EARNINGS: 02/12/2009

STATUS: Put. Formed a broad top from December to February and then broke down through the 200 day SMA (53.12) to start March. Rebounded through last week but came up short, and tanked. Rebounded on light volume as the market rallied back Tuesday and Wednesday. Failed at the 10 day EMA on this rebound and looking for CPLA to turn back down from here and really make the plunge. Our initial target is not that ambitious but a move to the target lands a 41%ish gain, but this pattern could head much lower than that.

Volume: 260.136K Avg Volume: 301.6K

BUY POINT: $48.66 Volume=350K Target=$44.55 Stop=$50.41

POSITION: CQX PJ - Apr. $50p (-47 delta)

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

Play Date: 03/18/2009

DIA (Diamonds Trust (DJ30 EFT)--$74.97; +0.89; optionable)

After Hours: $74.96

STATUS: Put. DJ30 rallied up to its November closing low and thus DIA did the same. Wednesday it touched the November low on the high and faded. Despite all of the Fed hype it could not punch through. Will see how the Dow reacts to the Fed news on the day after. If it stalls, however, it can give us a nice move lower. A move to the target lands a 41%ish gain.

Volume: 35.907M Avg Volume: 29.407M

BUY POINT: $74.05 Volume=37M Target=$71.00 Stop=$75.65

POSITION: DIJ PW - Apr. $75p (-42 delta)

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

Play Date: 03/18/2009

LLL (L-3 Communications--$63.46; +0.30; optionable): Military communications systems and equipment

http://biz.yahoo.com/p/l/lll.html

After Hours: $63.04

EARNINGS: 01/29/2009

STATUS: Put. Broad umbrella top starting in January that resulted in the February to early March drop. Sorry we missed that one. LLL bounced off the November low though it did undercut it some as it sold. It rebounded the past two weeks but volume slipped each day it rose until it showed a doji below the 18 day EMA (64.10) Wednesday on very low trade. Looking for a break lower on some rising volume to give us the downside play. A move to the target lands a 41%ish gain.

Volume: 983.971K Avg Volume: 1.255M

BUY POINT: $62.84 Volume=1.4M Target=$59.74 Stop=$64.14

POSITION: LLL PM - Apr. $65p (-51 delta)

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

Continuing Play ready to move:

Play Date: 03/10/2009

PCU (Southern Copper--$16.69; +0.60; optionable): Copper

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

After Hours: $17.00

EARNINGS: 10/28/2008

STATUS: Double bottom w/handle. PCU's pattern is setting up nicely as it climbed the past week to the February peak at the middle of the base and faded to test the 50 day EMA intraday, finding support and bouncing. Volume jumped up to average Wednesday as it rebounded as all commodities started to show better volume. Money flow has turned up sharply ahead of the price. Ready to move in as PCU makes the break.

Volume: 6.206M Avg Volume: 5.661M

BUY POINT: $16.82 Volume=6.5M Target=$19.95 Stop=$15.64

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

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