主题：04/15/2009 Market View -- 宁子

SUMMARY:

- INTC knocks stocks back, but they don't stay down, at least not all of them.

- A very decent pullback.

- Retail sales bummed investors Tuesday, but they forget about the more leading indicators.

- Fed sees more regions declining slower. A ringing endorsement.

- Four considerations right now as market moves at a critical level.

Down all day and then a late rally.

It is looking like a typical expiration week. Volatility is kicking in midweek with up and down action Wednesday then a late surge. Atypical is the lack of volume, but more on that later. There is also a lot of news. Earnings are flowing and while pretty decent they didn't help the upside. INTC results were not bad but it was not getting any help as the CEO mitigated company statements some by saying a bottom in the PC market does not necessarily mean a rebound. CSX (shipping) beat expectations but revenues were way down as freight levels were way down. Burger King said traffic was lower; a burger joint with slow traffic in a recession. Depressing. WMT was glum once more with comments on one of the network stations that there was no 'quick end' to the economic doldrums.

There was economic news as well with the CPI coming in at -0.1%, the first drop since 1955. Core was up 0.2%. Prices are indeed rather mild as noted Tuesday. They will be mild but we have a storm coming given the type of policies adopted. That storm is not here now, however, so we cannot let it color our view of the near term market. No we can save that for when the boomers are all on fixed incomes and seeing their nest egg eviscerated by inflation. The New York PMI was much better at -14.5. The Beige Book later in the day saw only 5 of 12 regions seeing a slowing of the downturn. Yet, that is better than the 10 of 12 that saw no slowing at all the prior month.

Investors were not happy regardless of the news. Stocks started lower but recovered. They gave it up, the recovered. Repeat and repeat again. Late in the session we saw dojis on the NYSE index charts and like the look: at support, dojis, good set up for a rebound. It started that rebound in the last hour instead of waiting. That took everything but SOX and NASDAQ 100 positive. Mentioned that expiration volatility, right? Even with the rally it left the indices in good position to bounce near term.

TECHNICAL. The intraday action was volatile as noted, but the indices held near support on a second day of pullback and bounced. Not bad action even just below resistance.

INTERNALS. The internals were stronger than the index prices showed. Breadth was positive on NYSE even when it was lower and flat on NASDAQ when it was down for nearly all of the session. That shows there were a few stocks coloring the market tape such as INTC and its related stocks on NASDAQ. Volume was again significant, this time in that it was lower versus Tuesday when the market sold. Volume was lower even though the market finished positive. Of course most of the session the market was lower; thus volume was tracking lower on the selling and that is a good thing. Of course there was no massive rush of trade as the buyers came back in. No distribution and no accumulation. Not bad for a test session. But . . . the issue with this upside move is the light overall volume on the last part of the rally. That light trade puts the rally at risk even with good leadership and a good pullback. Does it put it at risk tomorrow? Not necessarily. The momentum can continue on light volume until it does not. Sounds vague but that is the way this works.

CHARTS. Very nice pullback for ALL of the indices. NASDAQ held the 10 day EMA and the early April peak as well as the February peak. SP500 held the 10 day EMA and bounced nicely. Same with SP600. SOX was a laggard, gapping lower, but it also recovered to hold near support at the 10 day EMA after it tested lower toward the January peak. NASDAQ 100 is showing a very nice pullback to test the January/February twin peaks. Even with the late surge this action leaves the indices in very good position to move higher again even with the overall low volume on this move higher. As noted, the market can do this for quite some time. Ultimately the low volume will hurt the upside if trade does not come in. For now, however, the there are some good upside set ups shaping up once more on the indices and on stocks in general.

LEADERSHIP. The chips did a decent job of holding up despite INTC's treatment. That did not translate into gains in the sector but it did lend to some very decent pullbacks that may give us some new entry points. Financials came back late in the session ahead of the JPM results Thursday morning. Copper was a bit toppy though steel and other commodities can lend it some support while copper stocks test. Retail was a bit soft was well. Overall, despite the sluggish day, the same leadership is holding up well and is trying to set back up.

New York PMI improves nicely.

Manufacturing is not sexy. Retail sales are. Retail sales involve direct consumer action and most people watching financial stations or any news station are consumers. Thus they are more interested in retail sales than the manufacturing report.

Thus when retail sales were spanked 1.1% in March (even if they were up the prior two months in a row and that was indeed unexpected) most were bummed. When the New York PMI came out at -14.5, well off its previous read of -38.2 and the -35 expected, not many were paying attention.

They should. While New York was down in March, it was showing improvement before that. Not positive, but as with other areas, coming back up off the lows. That makes March more of the outrider. As seen in the 2000 to 2002 recession, one of the first indicators of improvement were the regional manufacturing reports. Retail changes almost always occur after. Thus the improvement in regional manufacturing is encouraging.

Encouraging but not a turn in themselves. Anything has to bottom before it turns, but even as the INTC CEO said, a bottom is not a rebound. It is good to see many of the indicators showing improvement in they are not diving as they were. That does not mean they have turned. We are watching, the signs are decent and the market has moved off the lows. The market still has not broken its downtrend on SP500, and the financials are on the SP500. SOX and NASDAQ 100 are trying to lead the way but ultimately the financials have to follow.

MARKET SENTIMENT

VIX: 36.17; -1.5. VIX made a lower closing low after last week's gap lower. It is starting to fade as it takes out a lot of the government-related fear that was propping VIX higher simply because the market did not know what was coming out of Washington next. Now it is pretty clear the direction we are going.

VXN: 38.31; -1.12

VXO: 37.97; -1.81

Put/Call Ratio (CBOE): 0.93; +0.17

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: +1.08 points (+0.07%) to close at 1626.8

Volume: 1.985B (-8.98%). Down most of the day so the low volume on the session was not bad. Overall it is not great, but Wednesday it was not bad and as noted the move can continue on low volume for quite some time.

Up Volume: 896.03M (+69.893M)

Down Volume: 1.143B (-274.932M)

A/D and Hi/Lo: Advancers led 1.7 to 1. Not bad at all given the modest gains. A few big boys were holding the index lower.

Previous Session: Decliners led 2.03 to 1

New Highs: 7 (-8)

New Lows: 14 (+4)

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

As noted, not bad action at all, tapping the 10 day EMA and the February and December peaks on the low and holding nicely. It is above that 1600 level that it used perfectly as support Wednesday, but it also has the January high at 1661 it has not taken out. Whether it breaks 1600 or 1661 as the next move is where the story is told for NASDAQ.

NASDAQ 100 (-0.44%) suffered because of INTC and some other big chips. Nonetheless it tested lower toward the January and February peaks and then recovered to positive, holding over the 10 day EMA. Looks quite good.

SOX (-1.51%) took its lumps thanks to INTC and AMAT, but it did hold over the 18 day EMA and closed just over the 10 day EMA. It still has higher highs and it did a good job of redeeming itself in the face of bad news. Need it because chips are the leader off the market bottom having never come back in March to make the lower low the other indices (outside of NASDAQ 100) did.

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

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

SP500/NYSE

Stats: +10.56 points (+1.25%) to close at 852.06

NYSE Volume: 1.48B (-15.39%). As with NASDAQ the volume was significantly lower and thus no accumulation on the rebound. No distribution on the selling, but again, overall light trade on this last move higher.

Up Volume: 1.069B (+550.358M)

Down Volume: 401.149M (-809.783M)

A/D and Hi/Lo: Advancers led 2.32 to 1. Was positive all session despite early losses.

Previous Session: Decliners led 2.14 to 1

New Highs: 8 (+1)

New Lows: 44 (-11)

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

Nice lateral action over the 10 day EMA (836) as SP500 tests back after hitting at the 850ish resistance Friday. Holding up well though the Tuesday volume was higher, but the Friday trade was solid. Looking at the JPM earnings Thursday morning to see if it can provide leadership for the financials after GS reported good results but then the huge stock offering. Positioned well for a run at 875 to 900, but it needs a catalyst to get the financials running again. As with NASDAQ it is over support at 800 to 825 but below resistance; it is surrounded and will make a break after this nice test.

SP600 (+1.46%) recovered from the Tuesday drubbing, holding the 10 day EMA on the low and recovering positive. That kept it over the early April peak and sets it up for a run at 250. If it can clear that (6 points away) it has a shot at 275. A lot depends upon the financials.

DJ30

Held the 10 day EMA near support and rallied back above 8000, the level so many are looking at. Very similar to the other indices: it is holding some support at 7875ish while looking at the late January and early February peaks at 8406 and 8313, respectively. DJ30 can trade up to those on a move off this level, and that will then really tell the upside story, i.e. if it can break through those levels that would be bullish.

Stats: +109.44 points (+1.38%) to close at 8029.62

Volume: 413M shares Wednesday versus 513M shares Tuesday.

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

JPM earnings will garner much of the attention Thursday morning. Initial claims is also out before the open, and a half hour into trade we see the Philly Fed PMI, important in that the Fed Beige Book said it saw some improvement in that region. The important thing for the upside to continue is to have the financials rally off JPM and the techs and particularly the chips re-engage.

As you can piece together from the above, there are four issues driving the action right now. First is that the indices hit next resistance and faded back. The break of that resistance is key to any further upside on this move, and this pullback from that bump into resistance looks good for another attempt at it.

Second, the low volume on the move higher the past two weeks tells us the move is losing buying interest and with resistance overhead we have to be conscious that it could fail. There was some distribution Tuesday, another indication the move is getting a hitch in its get along. That said, a move can continue on lower volume longer than you think; with resistance overhead, you need volume to punch through, however, and thus we need to be aware not everything is roses.

Third, expiration week is here and that means some volatility and it will likely continue Thursday. Thus wider swings intraday can give opportunity but it also makes things more treacherous. No reason to stick your neck out with expiration, resistance, lower volume: see a good move set up and then act.

Fourth, it is earnings season. The initial responses were positive but rather short lived. GS was solid and INTC was not bad, but they were not rewarded after RIMM and WFC were. A lot is riding on JPM to see if the season still has any upside pop in it, and GOOG after hours Thursday will also play a role.

With that in mind there are some good set ups after this pullback but we were not moving in Wednesday on the pullback simply because of the tensions listed above. If JPM is treated well the financials may gap away once more, but there are other sectors we are looking at such as chips, techs, etc. that likely won't gap away with financials on some positive news. There are some we are willing to get into as they bounce even with the indices at resistance and the overall low volume. We also have some downside at the ready, however, if a bounce on JPM rolls over or if the market simply does not like what it hears and collapses the nice pullback set up it has as the end of the Wednesday trade.

Support and Resistance

NASDAQ: Closed at 1626.80

Resistance:

1644 from August 2003

The January closing peak at 1653 (intraday)

1661 is the April 2009 prior peak

1666 is the intraday January 2009 peak

1780 is the November 2008 peak

1947 is the October gap down point

Support:

1623 is the early April peak

1620 from the early 2001 low

1603 is the December peak

The 10 day EMA at 1594

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

The 50 day EMA at 1523

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 SMA at 1487

1440 is the January 2009 closing low

S&P 500: Closed at 852.06

Resistance:

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:

848 is the October 2008 closing low

846 is the April peak

842 is the early April peak

839 is the early October 2008 low

The 10 day EMA at 836

833 is the March 2009 peak

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 811

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 8029.72

Resistance:

The early April peak at 8076

The April peak at 8113

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:

7965 is the mid-November 2008 interim intraday low.

7932 is the March 2009 peak

The 10 day EMA at 7916

7909 is the early January low

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

7867 is the early February low

The 50 day EMA at 7738

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): -0.1% actual versus 0.1% expected, 0.4% prior

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

New York PMI, April (8:30): -14.65 actual versus -35.0 expected, -38.2 prior

Capacity Utilization, March (9:15): 69.3% actual versus 69.7% expected, 70.3% prior

Industrial Production, March (9:15): -1.5% actual versus -0.9% expected, -1.5% prior

Crude oil inventories (10:30): +5.6M actual versus +2.5M expected, +1.6M prior

Fed Beige Book (2:00)

April 16 - Thursday

Housing starts, March (8:30): 540K expected, 583K prior

Building permits, March (8:30): 549K 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: 04/15/2009

GLW (Corning--$14.70; +0.11; optionable): Flat panels, etc.

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

After Hours: $14.61

EARNINGS: 04/27/2009

STATUS: Test 200 day SMA. GLW made us some money on its March run and it rallied into early April, peaking at 16 before the test the past week. It has held the late March peak on the test, closing at the 10 day EMA and showing a doji Wednesday on low volume. Excellent position for a new run higher and the hammer doji tells us to be ready for a move higher.

Volume: 9.659M Avg Volume: 19.628M

BUY POINT: $14.89 Volume=20M Target=$17.94 Stop=$13.97

POSITION: GLW HN - Aug. $14c (74 delta) &/or Stock

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

Play Date: 04/15/2009

ICE (Intercontinental Exchange--$86.80; +0.98; optionable): Energy exchnage

http://biz.yahoo.com/p/i/ice.html

After Hours: $86.77

EARNINGS: 05/05/2009

STATUS: Test 10 day EMA. ICE broke out from a 3 month double bottom with handle base to start April and rallied nicely up to 91. ICE made us some great money on the market part of the move, and now it is setting up to do it again. Nice test back to the 10 day EMA (84.65), holding that near support. Looking for a run to 100 off of this test.

Volume: 2.083M Avg Volume: 2.424M

BUY POINT: $87.44 Volume=3M Target=$99.92 Stop=$84.32

POSITION: ICE FQ - June $85c (63 delta) &/or Stock

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

Play Date: 04/15/2009

MU (Micron Technology--$4.50; +0.20; optionable): Semiconductor memory chips

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

After Hours: $4.48

EARNINGS: 04/02/2009

STATUS: Trend reversal. Have tried our best to ignore MU in this recovery, and sure enough MU did not form anywhere near the best pattern of the chips coming off the lows. Nonetheless MU rallied into February and then formed a Double bottom w/handle through March and broke out late that month. It then rallied again to start April, spurred on by some pretty solid earnings. That move took MU over its long down trendline. It has since tested, coming back to the 18 day EMA (4.17) the past week or so, showing some great upside volume spikes as it holds the break over the old trendline. Volume jumped back above average Tuesday and again Wednesday as MU held the 18 day EMA and bounced. Looks ready to continues its breakout run.

Volume: 28.901M Avg Volume: 23.706M

BUY POINT: $4.64 Volume=30M Target=$5.92 Stop=$4.22

POSITION: MU GH - July $4c (70 delta) &/or Stock

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

Play Date: 04/15/2009

QLD (ProShares Ultra QQQ ETF--$30.72; -0.04; optionable)

After Hours: $30.72

STATUS: Test breakout. QLD gapped higher last Friday, breaking out of a 5 month base, finally making a higher high. It is testing that move this week, holding the 10 day EMA (30) on the close. Volume is lacking on the move, but we are looking to catch the next bounce higher up toward 35, and that does not necessarily need volume to succeed.

Volume: 24.75M Avg Volume: 35.081M

BUY POINT: $30.94 Volume=35M Target=$34.92 Stop=$29.28

POSITION: QLA GD - July $30c (61 delta) &/or Stock

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

New Buy Points on Current Positions:

Play Date: 04/15/2009

AAPL (Apple Computer--$117.64; -0.67; optionable)

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

After Hours: $117.90

EARNINGS: 04/22/2009

STATUS: Test 200 day SMA. Earnings are not far away, but AAPL is acting very nicely for another run to earnings. Very nice test of the 200 day (116.82) underway as AAPL tapped the 10 day EMA on the low and rebounded, showing a nice doji that filled the Friday gap. No real volume on this move; no volume the past 4.5 months. Thus we are looking to play AAPL as it makes the next move higher.

Volume: 14.751M Avg Volume: 26.063M

BUY POINT: $117.89 Volume=25M Target=$132.77 Stop=$115.44

POSITION: QAA GC - July $115c (61 delta) &/or Stock

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

Play Date: 04/15/2009

DRIV (Digital River--$33.41; +0.15; optionable): Internet services

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

After Hours: $33.41

EARNINGS: 04/29/2009

STATUS: Test 10 day EMA. DRIV broke out in early March from a 5 month base and has stair-stepped up the 10 day EMA (32.48). It is making its third test of the 10 day after the breakout. Stocks tend to make 4 to 5 such runs on a strong breakout and we are looking to capture those runs as we focus funds into winning stocks on good moves. Plenty of time before its earnings to put in another good move.

Volume: 468.724K Avg Volume: 669.056K

BUY POINT: $33.66 Volume=800K Target=$37.95 Stop=$32.34

POSITION: DQI FF - June $30c (72 delta) &/or Stock

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

Play Date: 04/15/2009

QCOM (Qualcom--$40.90; +0.10; optionable): Telecom licensing, etc.

http://biz.yahoo.com/p/q/qcom.html

After Hours: $40.95

EARNINGS: 04/22/2009

STATUS: Test 200 day SMA. Great breakout and run in March that made us some great money. QCOM broke the 200 day (40.42) to start April, tested by giving it up, but then gapped over that level again last Friday. This week it is testing, trading in a tight range along the 200 day. It is moving to the March up trendline; the combination of the two looks ready to send QCOM higher once more.

Volume: 15.442M Avg Volume: 23.215M

BUY POINT: $41.28 Volume=24M Target=$44.95 Stop=$39.55

POSITION: AAO GF - July $41c (56 delta) &/or Stock

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