主题：03/26/2009 Market View -- 宁子

SUMMARY:

- Stocks start higher again, get a decent bond sale, finish strong again.

- Big money still chasing stocks into quarter end and we will use that to our benefit.

- Thursday bond auction lends market support as opposed to Wednesday's sale.

- Use run to quarter end to take gains while cutting back on new positions.

New-found appetite for stocks keeps the market tracking toward the next key level.

Lots of news Thursday to throw in the mix with the stock market rally from the early March lows. Jobless claims were roughly in line (652K) though continuing claims hit yet another record high (5.56M). Q4 Final GDP beat expectations at -6.3% (-6.6% expected). Geithner outlined his plans for regulation beyond basic financial institutions and the market didn't seem to think it was too radical. Analysts were active, raising RIMM's estimates and upping the likes of GOOG to buy. Earnings were THE surprise with BBY topping expectations by 20 cents and raising 2009 guidance. Others joined in as TXI beat by 27 cents and GME (GameStop) upped its guidance as well. Surprises in earnings are nirvana for market bulls given the pessimism levels are so high regarding the economy.

All of those positives were just sauce for the goose so to speak in that the market wanted to move higher anyway and these stories simply helped pave the way for that move. Stocks are ready to run and are indeed running toward the quarter end as big money funds chase stocks to populate their portfolios before quarter end with solid stocks. Thus stocks opened higher and rallied once more, and unlike Wednesday, received a boost early afternoon as Thursdays bond auction attracted a lot of willing buyers. In an auction of 7 year bonds, a relatively rare occurrence, subscribers topped the over 2.5 to 1. In other words, for every dollar of bonds offered, there were 2.5 dollars bid. Much stronger than the weak Wednesday showing where the bids barely covered the offering. The market never looked back, easily handling a half-hearted afternoon selling attempt to rally and close at the session high.

TECHNICAL. Bullish intraday action once more as stocks started higher on the open with gaps and then continued the move higher all session. A modest selling attempt mid-afternoon was again met with buyers that pushed the indices to close at session highs once more.

INTERNALS. Strong once more with solid 4:1 breadth and volumes surging up further above average, particularly on NASDAQ (2.6B shares). Strong upside volume again as big buyers are in the market running after the rally they missed two weeks back. No problem with that as they are pushing our positions higher.

CHARTS. Another solid upside session as the indices work toward next key resistance, notching higher highs, at least on this leg. Still a lot of serious work to make more important higher highs given the resistance overhead. SP500 cleared the 90 day SMA after bumping that level for three days. It still has 852, 875 and the 910ish ahead of it, but it is making progress. NASDAQ is already pushing the 1600 level we saw as the peak on this move (closed at 1587); 4% moves will get you higher in a hurry. That means NASDAQ may just run on up to the January peak at 1653. SOX broke to a new post-November high with a solid breakout of its own. All are on the path for a run to that next key resistance (875 to 900 on SP500; 1600 to 1653 on NASDAQ; 8000 on DJ30). That is a long run off the March low and they will be ready for a test after that. Looking at 7500 on DJ30, 800ish on SP500, and 1500ish on NASDAQ, higher if it makes it to 1653.

LEADERSHIP. Techs and chips were back in the leadership saddle and the market fared very well. They were not the only gainers as breadth shows the moves were broad-based. Key financials are showing some war and tear from their runs, but techs, after a brief rest, rallied again. Metals and commodities were on the rise again. Retail surged nicely. The same leaders that started the move were again in solid shape Thursday. That bodes well for the market as leaders continue to set up, break higher, rest, and break higher again as more and more solid stocks emerge to add to the leadership depth.

The driving force behind the rally's building strength.

The indices continue their move toward next resistance as money continues chasing stocks into the quarter end. Will they keep it up into earnings? The first hints at earnings are helping stoke the upside fires, and the further initial results to start the season can continue that run. After these surprise become 'old news', however, the market will have travelled a long way on this run and will need a test. From the strength in leadership, volume, and internals, it looks as if the test won't be that bad, i.e. making a higher low or holding at a logical level and then provide the launch of another solid upside move. That scenario could of course change if new questions arise regarding the economic data and recovery potential, but the excellent strength on this move is convincing even if it is driven at this juncture by big funds chasing down the bus of performance they missed off the early March low.

Given this scenario we have been trading with a plan, i.e. buying when the market and individual stocks said 'buy me'. We have also been taking gain on the way up. In that way we have banked nice profits thanks to others buying up our stocks, and then we are heavier in cash at the top of the move and in great position to ride out the test and see how things set up. Thus over the next 3 to 5 sessions as the market enjoys upside toward resistance we will be net sellers, locking in gain. That is why we have not been crazy buying more positions as the move continues. We did a lot of our buying earlier and less and less along the way though we don't pass up a good opportunity that augments our existing positions. Again, we know the market cannot rise forever and will put in a good test. That test will likely make a key low and then surge higher for an even better run if these internals remain strong. We will likely play some downside on that move from some financials that did not change their overall character even on this run higher and then see how the bounce sets back up.

MARKET SENTIMENT

VIX: 40.36; -1.89

VXN: 40.58; -0.77

VXO: 41.43; -1.68

Put/Call Ratio (CBOE): 0.92; +0.06

Bulls versus Bears:

This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market doesn't have the cash to drive it higher.

This is a historical milestone in the making. Bulls are impressively low considering we are in general a very optimistic country. The few bulls is a positive indication because it means most everyone that is getting out is out and there is money on the sidelines. In other words the ammunition boxes are full and as the market recovers investors will start opening up the boxes and firing. Little by little they will be forced to put more money into the market and there will be some rushes higher in fear they are missing the train. You relish times when sentiment is so negative because it means some tremendous buys are setting up. This could indeed be the opportunity of a lifetime, and you take advantage of it by buying quality stocks and letting them work for you as long as they will. If we can hold them for years, great.

Bulls: 28.9%. A fraction more bulls (28.4% last week) but not really commensurate with the market gains. Not a lot of belief in it just yet. 29.7% three weeks back, down from that 'optimism' 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: 43.3% versus 44.3% the prior week. Slowing the decline from 47.2% as here as well there were not many believers in the run higher. Still showing plenty of worry. 47.2% 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: +58.05 points (+3.8%) to close at 1587

Volume: 2.514B (+4.59%)

Up Volume: 2.451B (+906.133M)

Down Volume: 147.226M (-771.107M)

A/D and Hi/Lo: Advancers led 4.23 to 1

Previous Session: Advancers led 2.3 to 1

New Highs: 24 (+8)

New Lows: 16 (-6)

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

Big volume as NASDAQ continued its run toward 1600, covering the majority of the ground left in just one session, leaving it just 13 points away. As noted above, this strength indicates NASDAQ will give the January peak at 1653, the post-November high, a run on this move and not after a test. That would be fine. The closer it gets to that level on this run the better the position to test, make a higher low, and make another run at it. The market leader along with SOX and it is appropriate it is challenging the high on this move.

SOX (+5.91%) blew through the January high and is heading to the November peak (248), just 3 points away. Now we don't want to see it stall there but shoot on through, allowing the other indices to hit resistance, and then come back to test its breakout to a second higher high.

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

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

SP500/NYSE

Stats: -18.98 points (-2.33%) to close at 832.86

NYSE Volume: 1.81B (+2.04%)

Up Volume: 1.319B (+146.85M)

Down Volume: 480.994M (-106.898M)

A/D and Hi/Lo: Advancers led 3.86 to 1

Previous Session: Advancers led 1.95 to 1

New Highs: 18 (+2)

New Lows: 91 (0)

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

SP500 cleared the 90 day SMA (829) on the close, moving further into the January and early February range, trading roughly midrange right now. While SOX breaks out and NASDAQ rallied toward its post-November highs, the large caps are still trying to get into the top half of the range from the November low to the January peak. Serious resistance at 850, 875, then 900 to 910. May not make the latter tranche, but 850 to 875 is definitely within range. Bulls want to see it over 850 so it can come back and test that level versus a straight drop to 805 on another test.

SP600 (+4.45%) surged to the 90 day SMA with a strong move, but similar to SP500 it has lagged and finds itself in the lower half to just about the halfway point in the November low/January high range. 250ish is serious resistance and that is still 16 points away, a long run for SP600. It is putting in strong days, but it is still following the leaders in tech and chips.

DJ30

Another solid session has pushed the Dow to 75 points from 8000 where there is resistance on up to 8175. Volume backed off as the move loses a bit of strength but still momentum moving up toward the 90 day SMA at 8030. Likely to find resistance over the next few sessions in this range as it bumps the bottom of a seriously tight and orderly January to early February consolidation range with a bottom near the 8000 level. A punch on up to 8250 or so would be a good showing from the Dow with its new found strength.

Stats: +174.75 points (+2.25%) to close at 7924.56

Volume: 397M shares Thursday versus 454M shares Wednesday. After very strong upside volume on the moves higher, trade slipped below average Thursday on a solid 2+% price gain. Not the same strength as shown in prior moves but not discounting the Dow's show of strength due to one session of gains on lower trade.

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

The weekend comes and the end of quarter is just around the corner. Stocks continue to show buying strength, even building on strength, as the quarter end nears. Our best laid plan is that stocks continue higher on to the quarter end on Tuesday, maybe a bit beyond, just ahead of earnings season. A good run driven by some window dressing ahead of an earnings season that shows some tantalizingly interesting early strength puts the market in a precarious position in terms of continuing this part of the run. Almost three weeks of upside, hitting key resistance levels, end of quarter buying winding down, uncertainty about earnings. Interesting combination.

Thus we stick to the plan, letting positions run higher and with any luck on into the end of quarter on Tuesday or later. We will continue taking gain into any run. Indeed a strong gap higher Friday and we should all look at banking some more gain. Right now futures are modestly lower, however, so we will see. A build into a stronger session from a modestly lower open is yet another sign of strength and bodes well for the market overall. A build into a strong session and we sell some just as we would on a gap higher.

What about new buys? The big funds are chasing some stocks higher into earnings and there are some enticing set ups such as BRCM with its sudden test but nice recovery Thursday. So close to the potential peak how much new money do you want to risk? It would have to be, pardon the phrase, fast money looking to squeeze a bit more out or on a stock we feel will manage to hold well on a test and then rebound quicker than most. Earnings make things more of a crapshoot as well, and with the run into results you have to take into consideration the run into the news and selling when it becomes fact. Thus partial positions for the most part if looking to ride through end of quarter.

Moreover, it is Friday as well and we typically don't like to buy on Friday but sell instead. When the market is making a bullish move, Fridays are typically better sessions to sell than buy as stocks move higher into the weekend then start lower on Monday and build back up through the week. More reason to use any upside to take gain versus buy a lot of new positions.

Support and Resistance

NASDAQ: Closed at 1587.00

Resistance:

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

The January closing low at 1653

1666 is the intraday January 2009 peak

1780 is the November 2008 peak

Support:

1569 is the late January 2009 peak

1542 is the early October 2008 low

1536 is the late November 2008 peak

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

1505 is the late October 2008 closing low.

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

The 50 day EMA at 1473

The 18 day EMA at 1467

The 50 day SMA at 1463

1440 is the January 2009 closing low

1434 is the January intraday low

1428 is the mid-November 2008 low

1398 is the early December 2008 low

1387 is the 2001 low

1316 is the November 2008 closing low

1295 is the November 2008 low

1271 from is the March 2003 low, 1253 intraday

1262 from July 2002

1192 is the July 2002 intraday low

1114 is the October 2002 low, the bear market low

S&P 500: Closed at 832.86

Resistance:

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:

The 90 day SMA at 829

818 is the early November 2008 low

815 is the early December 2008 low

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

800 is the March 2003 post bottom low

The 50 day EMA at 798 held on the Wednesday low

The 50 day SMA at 792

The 18 day EMA at 779

768 is the 2002 bear market low

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

741 is the November 2008 intraday low

722 is a December 1996 low

681 is the June 1996 intraday peak, 673-71 closing

665 from August 1996

656-654 from January, April 1996

607-05 from November 1995

Dow: Closed at 7924.56

Resistance:

7965 is the mid-November 2008 interim intraday low.

The 90 day SMA at 8030

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:

7909 is the early January low

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

7867 is the early February low

7702 is the July 2002 low

7694 is the February intraday low

The 50 day EMA at 7633

7552 is the November closing low. KEY Level.

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

7449 is the November 2008 intraday low

The 18 day EMA at 7423

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

7197 is the intraday low from October 2002 bear market

7115 is the February 2009 closing low

7008 from February 1997 closing peak

6528 is the November 1996 peak

6489 from December 1996 closing peak

6356 is the April 1997 intraday low

Economic Calendar

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

March 23 - Monday

February Existing Home Sales (10:00): 4.72M actual versus 4.45M expected, 4.49M prior

March 25 - Wednesday

February Durable Goods Orders (8:30): 3.4 actual versus -5.2 prior (revised from -7.3)

Durables, Ex-Transportation, February (8:30): 3.9% actual versus -2.0% expected, -5.9% prior (revised from -2.5%)

New Home Sales, February (10:00): 337K actual versus 300K expected, 322K prior (revised from 309K)

Crude Oil Inventories, 3/20 (10:30): +3.3M actual versus +1.942M prior

March 26 - Thursday

03/21 Initial Jobless Claims (8:30): 652K actual versus 650K expected, 644K prior (revised from 646K)

Q4 GDP - Final, Q4 (8:30): -6.3% actual versus -6.6% expected, -6.2% prior

GDP Price Index, Q4 (8:30): 0.5% expected, 0.5% prior

March 27 - Friday

February Personal Income (8:30): -0.1% expected, 0.4% prior

Personal Spending, February (8:30): 0.3% expected, 0.6% prior

Michigan Sentiment - Rev, March (9:55): 56.0 expected

Upside:

Play Date: 03/26/2009

ATVI (Activision--$10.92; +0.66; optionable): Multimedia graphics software (games)

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

After Hours: $10.92

EARNINGS: 02/11/2009

STATUS: Cup w/handle. ATVI is breaking higher, making a new post bear market high as it moves out of a 4 month base. Strong money flow is leading higher and it looks as if ATVI is ready to follow it here. Nice quick move looks in the works.

Volume: 15.246M Avg Volume: 16.6M

BUY POINT: $11.01 Volume=18M Target=$12.74 Stop=$10.24

POSITION: AQV EB - May %10c (73 delta) &/or Stock

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

Play Date: 03/26/2009

RIG (Transocean--$63.98; -0.57; optionable): Offshore drilling

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

After Hours: $64.01

EARNINGS: 05/06/2009

STATUS: Flying plateau. Moving laterally in a tight range Tuesday to Thursday after breaking higher Monday. RIG cleared the February highs on this move, a new post-low high. It has not surged with the market, so we are looking for it to bloom a bit later. That is just fine as certain market sectors move at different times. Indeed as the rest of the market gets ready to test we may see RIG then step up and make its move higher as money looks for new places to go.

Volume: 11.567M Avg Volume: 8.715M

BUY POINT: $65.36 Volume=12M Target=$74.95 Stop=$62.77

POSITION: RKJ EM - May $65c (52 delta) &/or Stock

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

Play Date: 03/26/2009

SMTC (Semtech--$13.21; +0.93; optionable): Semiconductor integrated circuits

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

After Hours: $13.21

EARNINGS: 03/04/2009

STATUS: Test trendline. Looking right back at SMTC after taking it off following the Wednesday drop to near the bottom of its uptrending channel, hitting and holding the 50 day EMA (12.25) and then bouncing Thursday. Looking to play the run off the bottom of the channel on up to the topside which should be closing in on 16 by the time SMTC gets there.

Volume: 1.007M Avg Volume: 812.876K

BUY POINT: $13.66 Volume=1M Target=$15.95 Stop=$12.66

POSITION: QTU FP - June $12.50c (64 delta, low OI) &/or Stock

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

New Buy Point on Current Position:

Play Date: 03/26/2009

BRCM (Broadcom--$20.89; +1.09; optionable): Semiconductor integrated circuits

http://biz.yahoo.com/p/b/brcm.html

After Hours: $20.89

EARNINGS: 04/21/2009

STATUS: Test 200 day SMA. After a rougher session Wednesday similar to SMTC, BRCM bounced right back up over the 200 day SMA (19.90), showing some more solid volume as it recovered. Really like its character with that move and on a continued move higher we are adding positions to capture a few days to the upside.

Volume: 21.817M Avg Volume: 15.194M

BUY POINT: $21.08 Volume=20M Target=$24.00 Stop=$19.77

POSITION: RCQ ED - May $20c (63 delta) &/or Stock

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

Downside: Just being ready in the event the market rolls over.

Play Date: 03/26/2009

RATE (Bankrate--$25.00; +1.19; optionable): Internet bank and mortgage information

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

After Hours: $26.00

EARNINGS: 02/05/2009

STATUS: Put. Okay RATE has put together a nice run, but that has taken it to resistance from the July 2008 lows and on across into February. It is also bumping the 50 day EMA (24.94), a double layer of ice it has to break through. After this run we are looking for a test and a move back toward support at 20. A move to that level lands a 45%ish gain.

Volume: 305.196K Avg Volume: 516.684K

BUY POINT: $24.54 Volume=600K Target=$20.32 Stop=$25.48

POSITION: QIB QE - May $26p (-42 delta)

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

Play Date: 03/26/2009

STT (State Street--$30.12; +0.29; optionable): Regional bank

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

After Hours: $30.65

EARNINGS: 01/20/2009

STATUS: Put. Another financial that has rebounded to resistance and has stalled the past three sessions. Resistance is from the September low, November low, and February high. If the market reverses course and STT breaks lower on strong volume we will look to enter the play. A move to the target lands a 42%ish gain.

Volume: 11.318M Avg Volume: 13.023M

BUY POINT: $29.48 Volume=16M Target=$24.32 Stop=$30.87

POSITION: STT QX - May $30p (-40 delta)

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