主题：1/8/2009 Market View -- 宁子

SUMMARY:

- Market does some more testing, recovers to hold support ahead of jobs report.

- Jobless claims fall for second week but nobody believes it means anything.

- WMT sales rise less than expected as massive discounting from other retailers poaches discounters' sales.

- Market is set up to absorb an expectedly bad jobs report.

Another lower start, but indices hold, recover ahead of jobs report.

More economic news, but it was not worse than expected as with the Wednesday ADP report. Jobless claims fell to 467K (-555K expected), and unlike last week there were no immediate reasons for the drop other than typical skepticism of government figures. Same store sales were not good in December, but a 1% decline was, as with jobless claims, less than expected. WMT sales grew less than expected, however, and that cast even more worries on the entire retail/consumer/US economy/future of the world drama. Others performed better than expected, but with sales still falling it was a lot like a ship sinking a bit slower. The Bank of England cut rates, and get this, to the lowest level since its inception in 1694. LIBOR fell again, continuing its move lower with a sharp decline in the important 3-month rate (1.35% versus 1.4% Wednesday). That definitely doesn't hurt. Mortgage rates fell to the lowest ever for the fixed 30 year (5.01%). That doesn't hurt either.

A pile of news for the day before the jobs report. Stocks were down pre-market and on the open, but not heavily. Stocks scratched back after the first hour, then tested back through lunch, fading just missing turning positive. Stocks came off the lunchtime test with a rebound, and continued to stair-step higher all afternoon, sprinting higher into the close after fighting off a last hour attempt to push the market back. The afternoon saw a plan from several senators to protect homeowner's heading into bankruptcy, and that may have helped, but the market was on the rebound well before the announcement. Stocks pushed to gains on most indices (sans DJ30, the laggard this move), but not big gains. They did, however, hold key levels and showed some life ahead of the feared jobs report.

TECHNICAL. Intraday action was solid with a lower open giving way to a move higher, overcoming a midday slump, and sprinting into the close. Pretty solid action given the jobs report to come Friday.

INTERNALS. Not a super day, but considering the weakness and caution ahead of the jobs report, internals were fine. Breadth was decent on both NYSE and NASDAQ (1.5:1). Volume fell off a couple of clicks, coming in below average on both exchanges, but not bad. No heavy buying on the early weakness, but no heavy buying on the rebound either.

CHARTS. The indices were weak early, but they held where they needed to. NASDAQ and SP600 recaptured the 50 day EMA. SP500 tapped the 18 day EMA on the low and rebounded to close over the 10 day EMA. Same with DJ30, though it continues to struggle more than the other indices. SOX is in great shape at the 50 day EMA, reaching below that level and then rebounding to show a doji with tail on the candlestick chart. NASDAQ, SOX and the small cap SP600 all held above the December highs and bounced. All in all, very nice technical positioning on the pullback/consolidation after the last leg higher and heading into the Friday jobs report.

LEADERSHIP: Similar to the indices, there were good, orderly pullbacks in recent leadership groups such as metals (PCU, BHP), commodities, energy (APC, XTO, BHI), chips (BRCM, NVLS), techs (HPQ, QCOM). All tested and rebounded nicely. They are well positioned to move higher, and they need to swallow the jobs data and show the move.