主题：04/16/2009 Market View -- 宁子

SUMMARY:

- Choppy start but techs grab the lead and lead to a new post-November high.

- JPM solid earnings fail to ignite financials.

- Philly Fed better, but not enough.

- Still moving into earnings, leaders still making new post low highs, still looking for stronger volume, but also still riding the move higher.

Techs and chips take the lead, and the market needed them.

Lots of news. Lots. Earnings saw JPM beat but it struggled. NOK beat and it was up. Financials struggled, techs rose. That was pretty much the story of the session. LUV missed, BGG missed, but ATVI preannounced positive results thanks to 'Guitar Hero.' At least the kids can get lost in air guitar and drums as their futures turn into high taxes, high inflation, and a lower standard of living. Heard a figure today that kids today will each pay $135,000ish over their lives to pay just the interest on the debt taken on in the Obama three months of prudency. That doesn't include the massive amounts Bush heaped upon them with Medicare Part D, but at those levels who is counting, right?

Housing starts fell 10.8% after a 17.2% February gain. Easy come, easy go. Permits were pathetic as well at 503K versus 549K expected and 564K the month before. Jobless claims fell to 610K but continuing claims topped 6M for the first time ever (6.022M); the latter always gets worse before the former improves. Looks as if they are getting there. China reported GDP growth at 6.1%, enviable by most standards but the slowest growth in the land of the dragon in decades. Stocks started higher, but then the Philly Fed disappointed with a -24.4 reading. Better than the -35.0 March notched, but a rather sorry showing when the whisper was in the minus teens.

That led to a very choppy morning. Yes stocks gapped higher but they gave it back by midmorning in very halting trade. Fortunately for the market the techs and chips held up all morning while the financials struggled even with the JPM earnings, and in the afternoon they rallied the troops to some very respectable gains. Volume jumped on NASDAQ, moving above average as they broke to a new post low high. NYSE large cap indices managed much more modest gains and on rising but still well below average trade. There was no rush to the financials as the SP500 needed. Fortunately for the upside the techs made up for the lack of NYSE interest in something of a role reversal from Wednesday. More than that, however, as the techs moved to a new post-November high and on some volume.

TECHNICAL. Intraday the action was not bad overall if you could get through that choppy start to trade. A gap higher then up and down, filling the gap before a steady midday move higher and then a surge higher in the afternoon session. Positive intraday action once more.

INTERNALS. Solid breadth on both NYSE and NASDAQ (3.4:1 NYSE), aided by a 3% surge in the small caps. Small caps have not broken to a higher high but are at the cusp. They are up 9% in the past 5 sessions. Volume jumped to above average on NASDAQ, the best trade on that exchange since the second session of April. Good to see after the low volume rise, but it was just one day in many lower volume days. A positive yes, but not a trendline change. Of course you had NYSE with its below average trade, and though it was rising volume it was still below the Tuesday distribution trade. Some positives, yes, but still not exuding strength.

CHARTS. SP500 cleared the April peak but even with that there is still no new post-November high as it continues below the February interim peak. It has made a new post-March high and March was the low for the index, but that move did not change the overall downtrend. On the other hand NASDAQ mad a significant move as it cleared the January high, and THAT is a new post-November high. Volume was up and above average, another plus. NASDAQ has some momentum, and if earnings allow it, NASDAQ can move on up to the 1750ish and even 1786 at the November peak on this run. Just so happens the 200 day SMA is there as well. SP600, as noted above, matched the early January peak and is on the cusp of an important move but is not there yet. As we always say, until it makes the move a good chart is just a pretty picture.

LEADERSHIP. Techs and chips were obviously the main leaders but retail was strong as well. Steel and copper edged higher but they appear tired near term after some good moves. Leading financials are weary though there is some tremendous option activity in some of the regional banks ahead of their earnings. Perhaps they will provide financial leadership as the big names try to rest in place just as the techs and chips did while the financials led. Financials are needed for the rally to really run; techs, chips and financials have teamed up to produce good runs when moving together. Right now they are a bit out of sync but the indices are still moving higher.

SUMMARY. A good leadership move by techs and chips as they responded to a very good pullback to test the last move higher. Volume was up. Positives as the primary leaders in the rally got back into the action but bigger picture the overall volume remains low. Indeed NYSE volume remained below average on an upside move after a distribution session. Moving higher with the continuing upside bias and momentum and we are riding it higher, but we are also taking some gain on positions even as we enter some new ones because we know these low volume moves don't last forever. We also know, however, that they can continue higher much longer than any rational person believes they should, and thus we stay in the game.

MARKET SENTIMENT

VIX: 35.79; -0.38

VXN: 36.8; -1.51

VXO: 36.86; -1.11

Put/Call Ratio (CBOE): 0.75; -0.18

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: 43.2%. The market rally has revved up the bulls, jumping up from 36.0% the prior week. The sharp jump in the bulls continues. Back over the 35% range considered bullish, but as noted this is not a bearish indication yet. Has to get up to the 60% to 65% level to be bearish. Dramatic rise from 21.3% in November 2008, the bottom on this leg. 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: 34.1%. Continuing their decline, falling from 37.1% the prior week. Well off the high on this run at 47.2%. Hit the 34's on the lows, falling from 38.5% and 46.2% in mid-December. Just slipped below 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. 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). That was a huge turn, unlike any seen in recent history.

NASDAQ

Stats: +43.64 points (+2.68%) to close at 1670.44

Volume: 2.277B (+14.71%)

Up Volume: 2.023B (+1.127B)

Down Volume: 333.991M (-809.291M)

A/D and Hi/Lo: Advancers led 2.6 to 1

Previous Session: Advancers led 1.7 to 1

New Highs: 22 (+15)

New Lows: 9 (-5)

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

NASDAQ hits a new post November high and on rising, above average volume. Not bad action at all as the techs cement their position as main leaders on this run higher. It is hard to argue with the technical action and this higher high is a key move in the recovery. It will of course be tested but it is doing what needs to be done, i.e. taking out the resistance points one at a time. It ran into the January high and faded to test, then jumped back through it; that is how you win back the upside.

NASDAQ 100 (2.77%) bounced off its test of the prior highs as it moves on toward its November high. A move up to 1375 toward the 200 day SMA just over 1400 is a logical resistance point for this run.

SOX (+3.36%) also showed why it is a major leader on this run with a strong rebound and new post selloff high. It is coming up to the 200 day SMA, just over 4 points away, or half the Thursday move. Expecting a bit of resistance there but SOX could also run to 275 price resistance, and that is another 20 points.

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

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

SP500/NYSE

Stats: +13.24 points (+1.55%) to close at 865.3

NYSE Volume: 1.604B (+8.4%)

Up Volume: 1.252B (+183.065M)

Down Volume: 329.841M (-71.308M)

A/D and Hi/Lo: Advancers led 3.44 to 1

Previous Session: Advancers led 2.32 to 1

New Highs: 16 (+8)

New Lows: 69 (+25)

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

SP500 made a new April high and took out the October closing low, but it is still below the late January and February peaks. No higher high for SP500 yet. The financials are not responding that well to earnings, and if that does not change with some help from the regionals those two nearby peaks at 875ish could put the kibosh on this move before it makes it to 900ish.

SP600 (+3.03%) is on a rampage, up 9% in five sessions, clearing the November/January down trendline with some panache as it closed right at the late January high; spot on it. An interesting reverse head and shoulders pattern and breaking through the neckline but on the relatively low NYSE volume. Trying to assume some leadership.

DJ30

The blue chips were up but did not get the kick in the pants from JPM it needed. No volume and bumping spot on the October closing low on the Thursday close. A new high on this move off the March low but as you know, no higher high yet. If the big financials move again it can make a run at the late January peak (8406), and that would finally give it a higher high.

Stats: +95.81 points (+1.19%) to close at 8125.43

Volume: 359M shares Thursday versus 413M shares Wednesday. Lower, well below average volume on the move and that does not inspire much confidence.

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

Expiration Friday and there have already been some downside and upside moves in advance this week, the latest being the Thursday rally. As there were some significant moves both ways Tuesday through Thursday it is quite possible that Friday turns out to be a quieter session or a session dominated by one predominant move.

Earnings will again play an important role with GOOG's after hours results that were well-received until the CEO talked of 'uncharted territory' and a terrible ad environment. Will GOOG's worries blanket the rest of the techs and market in malaise? We will see; thus far the market has shaken off individual earnings . . . after a brief setback as on NASDAQ after the INTC numbers.

If we get some more upside out of this we will take some more gain as our positions move higher. As for new buys, well we will be looking for good moves but Friday is not our favorite entry time as another solid move higher would set up the market for some pullback to start next week, and that would either give us better entry points or start something more significant to the downside. The Monday after an upside expiration is often lower. There is also that low volume on this rise that will at some point bite it like a Charlie Horse if more upside volume does not come in, and we have to be cognizant of that and not buy into surges that are a few days old.

Thus we play it closer to the vest for new buys but if we see something really solid we can venture some shares. Again, however, on a good surge higher we bank some more gain. As stated above this kind of move can run further than rational thought would consider, but that does not mean it goes up forever. Thus we take advantage of good upside entry points when presented and also take gain on good moves and follow the moves higher with reasonable trailing stops.

Support and Resistance

NASDAQ: Closed at 1670.44

Resistance:

1780 is the November 2008 peak

1947 is the October gap down point

Support:

1666 is the intraday January 2009 peak

1661 is the April 2009 prior peak

The January closing peak at 1653 (intraday)

1644 from August 2003

1623 is the early April peak

1620 from the early 2001 low

The 10 day EMA at 1616

1603 is the December peak

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 1528

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

S&P 500: Closed at 865.30

Resistance:

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:

857 is the December consolidation low; cracking but not broken

853 is the July 2002 low

848 is the October 2008 closing low

846 is the April peak

842 is the early April peak

The 10 day EMA at 841

839 is the early October 2008 low

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 813

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 8125.43

Resistance:

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:

The April peak at 8113

The early April peak at 8076

7965 is the mid-November 2008 interim intraday low.

The 10 day EMA at 7954

7932 is the March 2009 peak

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 7753

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): 510K actual versus 540K expected, 572K prior (revised from 583K)

Building permits, March (8:30): 503K actual versus 549K expected, 564K prior (revised from 547K)

Initial jobless claims (8:30): 610K actual versus 658K expected, 663K prior (revised from 654K)

Philly Fed, April (10:00): -24.4 actual versus -32.0 expected, -35.0 prior

April 17 - Friday

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

Play Date: 04/16/2009

AKAM (Akami Technologies--$20.34; +0.63; optionable): Internet infrastructure

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

After Hours: $20.21

EARNINGS: 04/29/2009

STATUS: Ascending triangle. Taking another run at AKAM as it bounced back off the lower trendline and the 200 day SMA (18.33) and is now holding over the 18 day EMA and the upper trendline to the 5.5 month base. It wasn't ready to move to start April, but it has held the pullback, made a higher low and is in great position to make the next break higher.

Volume: 3.348M Avg Volume: 5.68M

BUY POINT: $20.62 Volume=7M Target=$24.88 Stop=$19.18

POSITION: UMU HD - Aug. $20c (60 delta) &/or Stock

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

Play Date: 04/16/2009

CTSH (Cognizant Technology--$23.37; +0.89; optionable): Business software services

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

After Hours: $23.37

EARNINGS: 05/05/2009

STATUS: Test breakout. Long time coming back around. Broke higher out of a 6 month consolidation to start April. Rallied near 24 and then is testing back this week. Tapped the 18 day EMA (22.17) on the Wednesday low and rebounded. Gapped higher Thursday and held the gain. Like the hold of the 200 day on the test and ready to move in as CTSH continues the move higher after breaking and testing that key resistance. Money flow is surging higher ahead of price and CTSH looks set to follow it.

Volume: 4.804M Avg Volume: 6.733M

BUY POINT: $23.56 Volume=9M Target=$26.95 Stop=$21.94

POSITION: UPU GS - July $22.50c (62 delta) &/or Stock

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

Play Date: 04/16/2009

SNDK (Sandisk--$14.43; +0.88; optionable): Semiconductors, flash drives, etc.

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

After Hours: $14.33

EARNINGS: 04/21/2009

STATUS: SNDK broke through the October low and gap down point last week, finally clearing that important resistance that stopped it three times this year. Strong volume as SNDK gapped higher last Friday, then volume faded to well below average as it tested back through Wednesday. Volume jumped back above average Thursday as SNDK jumped higher off this test. New higher high on this move and looks solid to make a run into earnings next week.

Volume: 8.213M Avg Volume: 7.375M

BUY POINT: $14.57 Volume=9M Target=$19.77 Stop=$13.32

POSITION: SWQ GP - July $14c (63 delta) &/or Stock

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

Play Date: 04/16/2009

VSEA (Varian Semiconductor--$22.72; +0.48; optionable): Chip equipment

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

After Hours: $22.72

EARNINGS: 04/30/2009

STATUS: Pennant. Nice break higher to end March as VSEA cleared a 5 month base. Rallied through the 200 day SMA (23.06) but then it dumped back last week. Held the 18 day EMA (22.01) and is working higher the past week, forming the pennant. Some good upside volume Tuesday, a nice high 'get ready' spike. Okay, so we are ready, waiting on VSEA to break the short down trendline in the pennant and give us the buy point for a run toward its earnings.

Volume: 856.907K Avg Volume: 1.274M

BUY POINT: $24.12 Volume=1.7M Target=$27.48 Stop=$22.43

POSITION: UES HX - Aug. $22.50c (61 delta) &/or Stock

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