主题：04/14/2009 Market View -- 宁子

SUMMARY:

- Stocks have a hard time getting over retail sales and the President's agenda, and cannot push the advance farther.

- Retail sales cannot make it three in a row, but no one was even looking for two in a row.

- PPI shows no threat of inflation until inflation rises.

- On the stagnation path once again.

- INTC earnings are solid but the reaction is negative. Earnings honeymoon may have been short and just kind of sweet.

Retail sales slow the indices just as they try to solidify the second leg higher.

Futures were modestly lower but when the March retail sales came out they were solidly lower. The PPI was neutral, showing no inflation pressures. Earnings were good with JNJ beating handily and confirming 2009 guidance and GS blowing out results but offering billions in a new stock issue. Surprisingly the economic data trumped the earnings results.

Stocks started weak but made a run that started on the heels of the initial 10 minutes of trade. It was good enough to get the indices scratching at positive just about an hour and one-half into the session. Then they tested, sporting modest losses into lunch. Everything was fine until the President delivered a strong affirmation of his 5 point 'agenda for change' that is itself a change from what many voting for him thought the change would be. Sound confusing? It isn't to the market. His expansive big government in every aspect of your life and promises to control, from the federal government, executive pay, sent stocks from just a modest pullback to test a good recovery to a sharp selloff as the afternoon session got underway.

Stocks sold to session lows in the span of 12 minutes, undercutting the Monday lows and pushing the indices to 2% to 3% losses. Things leveled out as Bernanke made is second speech of the day, and stocks did recover the losses suffered as the Obama speech concluded. They never got back near to session highs, however, but they did cut the losses back to the -1% range and less. Indeed SOX, the relative strength leader all session, turned positive for the second time in the session.

The negatives for the day, however, were too much to bear. In the last hour the indices ran into the early morning selloff lows and faltered. They tried to resume the move but in the last half hour gave up and slid down again. They avoided the session lows, but the losses ramped back up to the -2% to -3% range. The culprit for the selling: the financials. They looked pretty solid early, rebounding nicely from the weaker start. They suffered badly after the Obama speech and when they could not recover with the market in the afternoon, the rest of the market gave in. Not a great session, though with it just being day one of the selling there was not a collapse.

TECHNICAL. Intraday the action tried to redeem itself after the weak open but it folded the tent over lunch and never recovered.

INTERNALS. Breadth was modestly negative at -2:1 on both NYSE and NASDAQ. Breadth was not the issues. The problem was with volume. It was the strongest (average) on NASDAQ since early April. It was above average on NYSE, thus a bit more telling. Either way it was higher volume on selling and that is distribution, i.e. dumping of stocks more than accumulating them of late. Now the market can suffer a day of distribution in a continuing move higher, so we are not overly concerned about the rising trade (it was still just average on NASDAQ). Nonetheless, volume was weaker on the way up and the distribution happened at the top near resistance. Sellers clearly entered and were stronger than the recent buying. They were more active and could be even more so Wednesday given the response to INTC's earnings.

CHARTS. The indices lost a bit more ground than you want to see in one session. You want to see a more orderly pullback, and things were looking pretty good until the midday fireworks. The overall view of the charts is still positive as they are holding easily above next support. The drawback is this is just the first day of a pullback and 2% to 3% declines quickly mount up and leave a market little maneuvering room. The good thing is there is still room for a decline and test, e.g. NASDAQ to 1600 (another 2% loss) and SP500 to 825ish. The rising selling volume creates the question as whether they will hold that support. For now in good shape but you don't want to see the distribution continue.

LEADERSHIP. The chips were back in the game, something we were looking for, and they were helping prop things up. That was ahead of INTC's earnings, but once again chips were in the game. Financials were down early but rebounded nicely, ready to add needed support for the chips. After the morning session and the speech, however, the financials gave up. The chips could not do it alone, and then the techs struggled and the small caps tanked. The small caps are trying to establish some upside momentum but they keep getting dragged back. With the weaker economic data that is somewhat understandable, but if the overall economic picture is improving, the small caps will need to take a share of the lead before too long. As for the chips, despite no help they held up well ahead of INTC, but now we will see if they can do the same now that the news is out.

Retail Sales Disappoint by a Long Shot.

March gets people thinking of spring and renewal, and when the March results come in April and right around Easter the sense is even stronger. Thus the anticipation of a positive turn in retail sales given the January surge to almost 2%.

It was all premature retail expectation. March sales fell 1.1% versus the 0.3% gain expected. That doesn't jibe with the recent same store sales results but when most of those are weighted by WMT and WMT has a bad March, sales suffer. Recall that WMT March sales significantly missed expectations. There you go.

What was overlooked is that February's -0.1% reading was revised higher to +0.3%. After six months of plunging sales two back to back positive months is not bad even if March tumbled. And from what we are seeing, March could very well be revised higher. Typically what happens is that revisions rule. In other words, revisions are simply more accurate data versus the early results that are half data, half assumptions and speculation about what happened.

So we could see some upside revisions next month but from -1.1% those would be some hellacious revisions to get to positive. The March declines were broad with all areas but the staples in food and beverage (+0.5%) and health/personal care (+0.4%) posting losses. Again, it would require some hefty revisions to turn this pig's ear into the silk purse or even naugahyde for that matter.

That leaves speculation as to whether the 2-month increase was just a blip in an otherwise ugly downtrend. Of course, until the Tuesday data it was just a one-month blip to the upside with January riding Lone Ranger. The February revision made it 2 for 2. Thus even with the March downside the picture improved. Can you imagine what would be said if February was not revised to positive? Bomb shelter time.

The end result is the same from our perspective: before Obama even announced his massive spending called stimulus plan the dive lower in economic numbers was slowing and in several cases is reversing. They are not slamming on the brakes and accelerating out of 180 degree turns, just showing indications of slowing the losses and turning the ship. That means there will be the monthly ups and downs in the data that ALWAYS accompany turns. The knifepoint turn that never looks back is rare, and quite frankly, with the 'stimulus' package and massive social and governmental restructuring that has nothing to do with economic recovery, there won't be much stimulus for the economy.

No knifepoint turn in the economy ahead as slow times are set.

Thus there won't be any knifepoint turn and the data will be up and down in a slow, slow recovery similar to post-Great Depression and the 1970's. We have opted to go the route of big government and Keynesian 'dig the ditch, fill the ditch, that is stimulus' spending as our way out, and history proves this prolongs recoveries as funds are diverted from the entrepreneurs and capitalists that make the economy work to the government bureaucracy that wastes money and constructs roadblocks to recovery.

Indeed it was quite ironic today when the President was speaking and alluded to history showing that if government does nothing then recoveries take longer, e.g. Japan (though he did not point out Japan). The necessary second half of that statement that he left out, however, is that government has to do the RIGHT THING. Just as history shows that if nothing is done recoveries take longer, it also shows that the massive spending, tax increasing, and government growth the President envisions lengthens recovery periods by 3x what they would have been.

Think of it this way: the fire department gets a fire alarm and is at the building, ready to act in 2 minutes. Great response. Problem is, its response is to build a firehouse right next to the burning building in order to douse this fire and to prevent future fires like this in this area. It might work, but it will take weeks if not months and this current fire will be a total loss to the owner before that happens. The right response to get this fire out now and then use incentives to get the owner and other owners in the area to upgrade their facilities to make them less susceptible to fires. Our government wants to go the route of building a firehouse instead of, at much less cost via our tax dollars, putting out the fire now and stimulating owners to upgrade their buildings to prevent fires in addition to raising property values, increasing business, etc. There we go again, down the path of big government spending to solve problems the government simply does not have the expertise to solve and solve efficiently.

PPI shows producer prices going nowhere . . . for now.

The overall PPI fell 1.2% versus a 0.2% gain in February. Core PPI was flat as expected. That puts year/year overall at -3.5% and year/year core at +3.8%.

The news gives the inflation soothsayers more respite in the face of inflation to come. Indeed there is no inflation right now. Right now. The problem is 2 to 3 years down the road.

Why then? Because when the Fed pumps this much free money into the economy it has a great stimulus effect. It takes some time to get going (about 6 months per rate cut) but when rates are this low and money supply growth is this high for any length of time the stimulus is very strong. It does have to have the right climate as seen in the 2000-2002 recession, but when it takes hold it is powerful as seen in the housing bubble. Monetary policy did not get us out of that prior recession; well-timed supply side incentives to invest in the US did that. What monetary policy did was make available cheap money for that supply side stimulus to use once the recovery got going. The Fed simply failed to cut off the spigot and voila, the housing bubble (with assists from the Clinton and Bush administrations as well as the devils in denial in the Congress, e.g. Dodd, Frank and Schumer).

We are likely to see quite a market jump thanks to this Fed policy and indeed some of the goose higher on this run is because the Fed became even more aggressive with its direct purchase of US Treasuries for the first time in the Fed's history. There will likely be more upside as that is the historical response to this kind of monetary flooding.

Inflation is the toll to be paid.

The problem is the price you pay later. With the Fed in the easy money mode again and the Administration in the easy spending mode again, the inflation expectations are quite high. Gold is off its high, but it had a heck of a run and needed to retrench. It will get back on track as inflation fears increase over the coming months and the financial markets anticipate this ahead of time. You cannot have 0% interest rates for banks and more deficit spending than the aggregate of all prior presidencies and come out on the other side free and clear of baggage. The baggage for this kind of spending and government growth is inflation. Saw it in the 1970's when the government exploded in size thanks to massive amounts of regulation, and the same will occur here.

Sad thing is, our kids and grandkids will have to deal with this and a lower standard of living, yet it could have been avoided. History shows the roadmap to stimulating the economy without creating inflationary pressures, but politics and social ideals and engineering are taking precedence over what has made us great, and if it continues we are, despite all of the lofty rhetoric about reclaiming past glories, moving from a 'boom and bust' cycle (that is of course inherent in any economy, free or centralized), 'investing in the future', heading for another period of stagnant growth with the bookends of high unemployment and high inflation that will likely see the baby boom generation through their golden years with inflation eating into what savings they have left.

It doesn't sound promising or much fun. I was a teenager in the 1970's and they stunk. It was a bad time in many ways other than just the economic issues. Crime was high, US morale was low, hope was something our parents once had. I don't want to go back there. I don't want my kids to live through that kind of impotent malaise. We are speaking out but many of the new voters were not alive in the 1970's and the history books do not tell the story of how bad things were. Thus we are, sadly, going to likely repeat the mistakes of the past.

MARKET SENTIMENT

VIX: 37.67; -0.14

VXN: 39.43; +0.09

VXO: 39.78; +0.69

Put/Call Ratio (CBOE): 0.76; +0.09

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: 36.0%. Sharp jump in the bulls, moving back above 35%. Below 35% is a bullish indication. Above is not so bullish but is not bearish until higher levels. 31.0% the prior week up from 28.9%. Still well below the 43.0%, the prior top of the recovery as the market rallied off the November low. 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: 37.1%. Fewer bulls but not a commensurate fall compared to bulls and their rise (38.0% last week). Big drop from 43.3% and 44.3% before that. The decline was slowing its fall from 47.2%, the peak for the run this year but no more. 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. Bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment on this move. 35% is the level that historically indicates excessive pessimism. 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: -27.59 points (-1.67%) to close at 1625.72

Volume: 2.18B (+22.57%). Monday we discussed the problem of low volume advances and Tuesday the market showed what can happen. Not a gutting but some higher volume (average) the sellers were more pronounced than the recent buyers on the push higher.

Up Volume: 826.137M (-30.466M)

Down Volume: 1.418B (+511.792M)

A/D and Hi/Lo: Decliners led 2.03 to 1

Previous Session: Advancers led 1 to 1

New Highs: 15 (-11)

New Lows: 10 (-1)

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

Gapped lower, rallied back just about to flat, but could not hold the move. Too much to fret over with the economy, more earnings to come, and more talk of federal expansion and control of the private sector. NASDAQ sold back to the prior April peak, but is likely to test the February peak (1598) at a minimum, just another Monday session away. If the distribution continues then it likely goes lower and things get dicey with a potential double top spanning January and April.

SOX (-0.24%) was a warhorse in a weak session, moving solidly higher but unable to withstand the tide of all the other sectors. It did hold above its November peak once more, holding that higher high it just made. It deserves a test and it is likely going to get one after INTC and we see how the chips can hold, particularly the equipment makers given INTC's lowered plans on capital expenditures.

NASDAQ 100 (-1.07%) was also a relative strength leader as it limited the losses to 1% and is holding easily over the January and February peaks. After a pullback to 1300 it will be in position to make the next move higher. It and SOX look very good.

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

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

SP500/NYSE

Stats: -17.23 points (-2.01%) to close at 841.5

NYSE Volume: 1.749B (+18.11%). Volume was up and back above average on the selling. As with NASDAQ, some distribution. The volume was, however, lower than the Friday buying volume; some silver lining.

Up Volume: 518.147M (-496.09M)

Down Volume: 1.211B (+750.329M)

A/D and Hi/Lo: Decliners led 2.14 to 1

Previous Session: Advancers led 1.53 to 1

New Highs: 7 (-1)

New Lows: 55 (-18)

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

SP500 sold back from 850 resistance it cracked but did not obliterate. The October lows are trouble for the large caps. There are potential support points at 815 from the early December low, and then there is the 50 day EMA at 809. Thos are not anywhere near the Tuesday close, meaning the large caps could have some serious downside here if the financials don't step back up soon.

SP600 (-3.03%) touched the November/January down trendline Monday and beat a hasty retreat Tuesday on above average volume.

DJ30

Same story for the blue chips, failing at the October low at 8175 and peeling back on the strongest volume of the month. Holding the 10 day EMA on the close. Not a massive reversal and still in the 'normal' pullback mode. The higher volume, as with the other indices, remains a serious issue and needs to knock it off.

Stats: -137.63 points (-1.71%) to close at 7920.18

Volume: 513M shares Tuesday versus 424M shares Monday.

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

Tuesday night it was GS with great earnings but a stock offering that got it slapped around. INTC broke higher Tuesday but could not hold the move. After hours some solid earnings and gross margins. It said the PC market bottomed in Q1 and would return to normal seasonal patterns. Then it said it would spend less on facilities and equipment. It also said gross margins would be in the mid-40's versus the 46% to 47% the street expected. That gutted it and it was down 5.5% after hours taking the chip equipment stocks lower with it. This will be a real challenge for the market: its primary leadership group will be under some serious pressure.

There is also the CPI, NY PMI, Industrial production and capacity. Then the Fed Beige Book straggles in during the afternoon session. It is also expiration week and midweek can show some volatility with bigger swings. Saw some of those in the financial sector. Economic data influenced the Tuesday action but it is not going to do a lot to impact the Wednesday start given the INTC news.

So the market gets a real test after another pretty solid earnings report looks to be dusting up the futures to the downside again. Could it be that the early earnings love affair after RIMM, BBBY, WFC's pre-announcement is already over? The market hit next resistance, moved modestly through it, but then could not hold it. It is now testing on rising volume.

We will see how INTC is truly treated tomorrow, but if the chips are going to stumble then the selloff could have some significant downside. As the market could not capitalize on the late recovery attempt, the volume was up, the INTC results are not well received, Asian markets are lower, and it is expiration week, we will ready to take some off the table as opportunity is presented if an early test is not sharply reversed to the upside. If the latter we will, as always, look for some upside opportunity if support holds and good stocks bounce, but we have to also keep focused on existing positions and preserve gain as the volume and earnings reception are teaming up right now.

Support and Resistance

NASDAQ: Closed at 1625.72

Resistance:

1644 from August 2003

The January closing peak at 1653 (intraday)

1666 is the intraday January 2009 peak

1780 is the November 2008 peak

1947 is the October gap down point

Support:

1623 is the April peak

1620 from the early 2001 low

1603 is the December peak

The 10 day EMA at 1600

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

1587 is the March 2009 high is getting put to bed again

1569 is the late January 2009 peak

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

The 50 day EMA at 1519

1505 is the late October 2008 closing low.

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

The 50 day SMA at 1484

1440 is the January 2009 closing low

S&P 500: Closed at 841.50

Resistance:

846 is the April peak

848 is the October 2008 closing low

853 is the July 2002 low

857 is the December consolidation low; cracking but not broken

866 is the second October 2008 low

878 is the late January 2009 peak

889 is an interim 2002 peak

896 is the late November 2008 peak

899 is the early October closing low

919 is the early December peak

944 is the January 2009 high

Support:

839 is the early October 2008 low

833 is the March 2009 peak

The 10 day EMA at 833

The 90 day SMA at 827

818 is the early November 2008 low

815 is the early December 2008 low

The 50 day EMA at 809

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

800 is the March 2003 post bottom low

768 is the 2002 bear market low

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

741 is the November 2008 intraday low

Dow: Closed at 7920.18

Resistance:

7932 is the March 2009 peak

7965 is the mid-November 2008 interim intraday low.

The April peak at 8076

8141 is the early December low

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

8197 was the second October 2008 low

8375 is the late January 2009 interim peak

8419 is the late December closing low in that consolidation

8451 is the early October closing low

8521 is an interim high in March 2003 after the March 2003 low

8626 from December 2002

8829 is the late November 2008 peak

8934 is the December closing high

8985 is the closing low in the mid-2003 consolidation

9088 is the January 2009 peak

Support:

7909 is the early January low

The 10 day EMA at 7891

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

7867 is the early February low

The 50 day EMA at 7726

7702 is the July 2002 low

7694 is the February intraday low

7552 is the November closing low. KEY Level.

Economic Calendar

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

April 14 - Tuesday

PPI, March (8:30): -1.2% actual versus 0.1% expected, 0.2% prior

Core PPI (8:30): 0.0% actual versus 0.0% expected, 0.2% prior (revised from 0.1%)

Retail sales, March (8:30): -1.1% actual versus 0.3% expected, 0.3% prior (revised from -0.1%)

Retail ex-auto (8:30): -0.9% actual versus 0.0% expected, 1.0% prior (revised from 0.7%)

Business inventories, February (10:00): -1.3% actual versus -1.2% expected, -1.3% prior (revised from -1.1%)

April 15 - Wednesday

CPI, March (8:30): 0.2% expected, 0.4% prior

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

New York PMI, April (8:30): -35.0 expected, -38.2 prior

Capacity Utilization, March (9:15): 69.7% expected, 70.9% prior

Industrial Production, March (9:15): -0.9% expected, -1.4% prior

Crude oil inventories (10:30): +1.6M prior

Fed Beige Book (2:00)

April 16 - Thursday

Housing starts, March (8:30): 550K expected, 583K prior

Building permits, March (8:30): 550K expected, 547K prior

Initial jobless claims (8:30): 658K expected, 654K prior

Philly Fed, April (10:00): -32.0 expected, -35.0 prior

April 17 - Friday

Michigan Preliminary sentiment, April (9:55): 58.5 expected, 57.3 prior

Upside:

Play Date: 04/14/2009

OPTR (Optimer Pharmaceuticals--$13.15; -0.19; optionable): Biotechnology

http://biz.yahoo.com/p/o/optr.html

After Hours: $13.16

EARNINGS: 03/11/2009

STATUS: Breakout test. Very nice late March breakout from its 3 month ascending triangle. Nice rally to 14 on the high and then testing back the past week and one-half, holding near support at the 18 day EMA (12.94), keeping it above the peaks in the base. Nice breakout to a new all-time high (a new issue in mid-2007) and a great-looking test is setting up the next break higher.

Volume: 284.617K Avg Volume: 269.629K

BUY POINT: $13.34 Volume=325K Target=$15.48 Stop=$12.81

POSITION: QDT FV - June $12.50c (63 delta, low OI) &/or Stock

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

Play Date: 04/14/2009

RRC (Range Resources--$41.02; +1.10; optionable): Independent oil and gas

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

After Hours: $41.02

EARNINGS: 02/24/2009

STATUS: Pennant. RRC is testing the mid-March breakout from a 4.5 month trading range. Nice surge to 46 on the run and then an up and down pennant formed using the top of the old range as support. Nice low volume the past week as it tests back to the 200 day SMA (41.20) just over the top of the base. Super money flow is surging higher. Nice doji action at the support and just waiting for a big of a break higher to show the buyers are back and ready to send it higher.

Volume: 3.267M Avg Volume: 3.024M

BUY POINT: $42.66 Volume=4M Target=$49.72 Stop=$41.08

POSITION: RRC FH - June $40c (54 delta) &/or Stock

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

Play Date: 04/14/2009

XLNX (Xilinx--$20.71; +0.40; optionable): Semiconductors

http://biz.yahoo.com/p/x/xlnx.html

After Hours: $20.44

EARNINGS: 04/22/2009

STATUS: Cup w/handle. Tuesday XLNX started the breakout from 6.5 month base, again moving on solid volume. Somewhat volatile on the session as the market moved up and down intraday but XLNX closed well. Gapped higher Thursday, clearing the 200 day SMA (20.13), then tested the gap, filling it Monday with a tap down to the 18 day EMA (19.60) before rebounding on the best volume in three weeks, almost hitting average. Nice test and recovery as the buyers stepped back in. After that shakeout XLNX broke higher. Now after the INTC earnings XLNX may come back some in the morning; it was doing its own thing after hours, not coming back at all but we will see what Wednesday brings. On a test that holds the 20.35ish range and a bounce we look to move in. If chips improve and the market overall holds decently we are looking to ride higher up to earnings and then take at least part of the gain off the table. Will see how well it trades to decide if we want to take it off before they are announced.

Volume: 9.328M Avg Volume: 9.504M

BUY POINT: From the close: $20.77. If it tests on the INTC news we will catch it when it bounces. Volume=11M Target=$23.95 Stop=$19.59

POSITION: XLQ FD - June $20c (62 delta) &/or Stock

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

Downside:

Play Date: 04/14/2009

GIS (General Mills--$49.49; -0.88; optionable): Cereal, other packaged and processed foods

http://biz.yahoo.com/p/g/gis.html

After Hours: $49.49

EARNINGS: 03/18/2009

STATUS: Downside. GIS is in a continuing downtrend from September 2008. It gapped sharply lower in March on its earnings, then fought back through last week, but it could not even fill the gap. It started to sag Friday and then Tuesday GIS tanked below the April consolidation attempt, falling on the first above average volume session since the first of April. Ready to move in as GIS continues moving lower. A move to the target lands a 47%ish gain.

Volume: 4.697M Avg Volume: 4.5M

BUY POINT: $49.36 Volume=4.5M Target=$47.24 Stop=$50.44

POSITION: GIS QJ - May $50p (-48 delta)

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

Play Date: 04/14/2009

NDAQ (Nasdaq Stock Market--$28.56; -3.85; optionable): NASDAQ exchange

http://biz.yahoo.com/p/n/ndaq.html

EARNINGS: Mid-June

STATUS: Continuing downtrend. Peaked in early 2008 and has trended steadily lower until January. It has put in some lows at 18 and is trading in a range between 18 and 24. It did not make it that high this time around, gapping lower Tuesday on elevated though still below average volume. Looking for a run down to the bottom of the range. That move brings a 46%ish gain.

Volume: 3.254M Avg Volume: 4.11M

BUY POINT: $20.22 Volume=4.5M Target=$18.15 Stop=$20.88

POSITION: NQD QD - May $20p (-41 delta)

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

Play Date: 04/14/2009

SOHU (Sohu.com--$39.96; -4.57; optionable): Chinese internet

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

After Hours: $39.96

EARNINGS: 02/09/2009

STATUS: Rolling range. SOHU is one of the stocks banging up and down in a trading range the past 4 months. It has formed something of an ascending triangle, a bullish pattern, but this last move higher to the top of the range has come on lower and lower below average volume. Thus after a decent surge Monday to the top of the range on a return to above average volume it showed a low volume doji Tuesday. This kind of action has signaled a run down in the range, and with such a lengthy run the past two weeks on light trade SOHU is ripe for another pullback. We are just looking to trade down to the middle of the range as an initial target. That gives us a 41%ish gain.

Volume: 6.217M Avg Volume: 1.35M

BUY POINT: $49.58 Volume=1.6M Target=$45.48 Stop=$51.12

POSITION: UZK QJ - May $50p (-46 delta)

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