主题：04/02/2009 Market View -- 宁子

MARKET SENTIMENT

VIX: 42.04; -0.24

VXN: 42.29; -0.19

VXO: 44.47; +1.47

Put/Call Ratio (CBOE): 0.69; -0.22

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: +51.03 points (+3.29%) to close at 1602.63

Volume: 2.71B (+23.2%)

Up Volume: 2.427B (+792.66M)

Down Volume: 379.058M (-162.085M)

A/D and Hi/Lo: Advancers led 3.68 to 1

Previous Session: Advancers led 1.9 to 1

New Highs: 29 (+16)

New Lows: 10 (-10)

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

Gapped higher and rallied over the February high at 1598, taking a look at the January high at 1666 on the session high at 1623. If faded to close just over 1600, not yet ready to take on that January peak. Great volume on the move so there is buying in the techs that is propelling them higher. NASDAQ may not be ready to take out that resistance just yet, but NASDAQ is in great position to test and then rally on back through. Indeed, given the move just started anew it could just blast on up from here.

SOX (+4.28%) gapped higher and surpassed the late March peak, but could not hold the move into the close. On the high it challenged the November peak, but it was not ready to take that out Thursday. Still solid and still looks ready for a break over the November peak and challenge the 200 day SMA.

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

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

SP500/NYSE

Stats: +23.3 points (+2.87%) to close at 834.38

NYSE Volume: 1.875B (+24.74%)

Down Volume: 160.381M (-94.104M)

A/D and Hi/Lo: Advancers led 5.95 to 1

Previous Session: Advancers led 2.96 to 1

New Highs: 15 (+7)

New Lows: 68 (+14)

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

Nice action, continuing to knock down the resistance levels, moving through the late March peak (833) on the close. That still leaves SP500 in the middle of its November to early February range. On the high it tapped toward the October low (849) and backed off some. That is basically the middle of that trading range. SP500, similar to NASDAQ, just made a higher low this week so you would expect there would be more gas in the tank to push the large caps through this level and on up to 875, the February peak. Then a test. The jobs report may have something to say about whether it makes a continued move from the close, but even if it knocks it back some we still anticipate a recovery to continue the move.

DJ30

Nice gains on a return to above average volume, and the Dow cleared 8000 on the high (8076) and hit the bottom of the range from mid-January to early February. That is resistance on up to 8175, the October closing low. Lots of heavy resistance near at hand so the Dow is about to give us a look at just how strong this move is.

Stats: +216.48 points (+2.79%) to close at 7978.08

Volume: 442M shares Thursday versus 361M shares Wednesday.

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