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主题：03/24/2009 Market View -- 宁子
家园 03/24/2009 Market View SUMMARY:
- A hangover from the Monday party leaves the market lower.
- Another massive power grab attempt as the Administration milks this 'crisis' for all it is worth.
- Geithner gets some 'hand' with respect to Congress.
- Good leadership looking for another run to end the quarter and move into earnings season.
Big rush higher leaves a vacuum to fill on Tuesday.
It would have been nice to see a continuing move to the Bank Plan push on Monday, but early on that was not going to be the case, at least at the open. As often happens, after a big surge higher the market takes a powder and shows a sluggish session. That is what happened Tuesday. Most everything that was up Monday was heading the opposite direction Tuesday, at least as far as equities were concerned. Oil was up a big more (54.05, +0.25). Gold was down more (926.40, -26.10). Bond yields were basically flat (0.91% 2 yr, 2.69% 10 year). The dollar was stronger, however, substantially so (1.3455 versus 1.3632), recovering some significant ground after getting b**ch-slapped following the Fed's '4% mortgage in every pot' new New Deal.
The market still had leaders moving upside (materials, metals, elite financials, China) and after Bernanke and Geithner finished their questioning in from of the House Financial Services Committee they helped move DJ30 and SP500 back to the upside and indeed positive by mid-afternoon. Maybe it was that B & G both showed some backbone they lacked in prior hearings. Bernanke actually got ticked off at a stupid question, and when the questioner asked why he would not answer it 'yes or no' Bernanke basically told him because it was a stupid question. Then there was Geithner, the man-child looking more like Beaver Cleaver than Secretary of Treasury, finally acting with some air of confidence and authority.
Maybe that helped the market rebound. After a bit of time, however, the market came back to reality. Geithner had outlined yet another of the largest power grabs in federal history, i.e. saying legislation is to come granting the federal government the authority to seize ANY private company that the feds deem is in distress and would be in the public interest to seize given the breadth of its business. That is monstrously frightening, '1984'-like federal power seizure. GE is a big company with many important businesses to the public, say its defense components. If it gets into trouble, at least by the government's perspective, then it would be open season.
When it came back to reality, the positive move on the large cap NYSE indices faded. It was not a bad fade, just back into the range they ran in for most of the session. The last 20 minutes, however, were rocky as the indices logged half or more of their gains in that short time span. That pushed modest losses to significant 2% to 3.6% (outside of DJ30 and its -1.49% decline) declines. Not a great follow up to Monday, but the indices were not left in bad shape with lower volume and still holding key over key levels.
TECHNICAL. Intraday the market had the old weak to stronger action going for it, though NASDAQ was a notable laggard all session, and by early afternoon it looked pretty solid with SP500 and DJ30 turning positive. That couldn't hold and they faded back to their earlier levels. That was okay. The last 20 minutes, however, were not. Modest losses doubled and more as sellers slipped in late and took modest losses to losses of 2% and more.
INTERNALS. -2:1 breadth was not positive but not deadly as it would be in more 'normal' times. The key to the move, even with the last 20 minutes when trade levels moved higher, is that volume remained lower, and significantly so (-14% on NYSE, -9% on NASDAQ). Trade came in below average on both exchanges. Lower volume shows no sellers moving in and trying to turn the market again but more of a lack of buyers. The late dip was not great but at least the volume was lower.
CHARTS. Despite the slight early afternoon peak positive by SP500 and DJ30, the indices made no headway. Indeed the last 20 minutes of selling turned modest losses into significant losses. There is still support at the recent peak for NASDAQ and SP500 as well, though that does not leave a lot of room to work with. If this is the second leg higher off the March low, however, that is where the best hold is. The indices still have a lot to move through. SP500 is in the bottom half (more like quarter) of the January to mid-February range, and there is a wad of overhead supply up to 880, then 920, and after that the January peak at 944. NASDAQ has 1595 to 1605 and then the January peak at 1666. Lots of work to punch through but if this leg is for real they should do it before too much time passes.
LEADERSHIP. Materials were solid, particularly steel as that metal firms up after some hard times earlier in March even as copper made its upside move. Some key financials (MS) made good moves, but they had a hard time holding them into the close. Others are setting up for a new move, however, e.g. WFC. China stocks were solid as well. Energy, a Monday leader, held up quite well and looks good moving higher. There is leadership out there and it is moving, in position to move, or is close to being there. Every rally needs this.
家园 THE ECONOMY Another hearing, another proposed power grab.
Back in the U.S, back in the U.S., back in the USSR. Every hearing, every press conference, every new bit of news deals with some new attack on our system and rights. The crisis is certainly being used as an attempt to change our country in ways it could never be changed in less breathless times.
The litany of abuse grows longer every day.
An attorney general cannot release your name to the press because you took a bonus because that would open him up to suit for violation of privacy rights. So he threatens you, saying if you don't return the bonus, a bonus you legally contracted for, that is not against public policy, and was an inducement to get you to stay and help fix a problem you did not cause, you will be sued and then your name will be out in the public as well. I cannot blackmail you, you cannot blackmail me without violating the law, but our elected officials can do it.
Congress tries to pass legislation that would tax a discrete group of individuals 90% of that very same bonus, a bonus that Congress KNEW about, as a way to show indignation and throw voters off the scent of Congress' failure for several years to adequately mind the store, instead taking kickbacks to force lenders to loan to non-creditworthy individuals.
A massive spending bill is forced through Congress without anyone reading the bill and without providing it in the usual computer format where legislators can search for key terms in order to find provisions being slipped in without the light of day. Trickery, chicanery, and a general lack of character. We try to teach our kids character, what is right, what is wrong, and how to stand up and speak out when there are wrongs being committed, yet our legislators show sharp, unscrupulous, and indeed dishonest character in how they 'negotiate' legislation.
Tax money is used by publicly supported groups to hire the poor, put them on buses rented by the group (with your money) and then head out to AIG employee homes to conduct 'spontaneous' protests and the media reports it as if it was indeed spontaneous, knowing full well the genesis of the theatrical performance.
A Congressman wants to tax every intraday trade in the financial markets, believing that these trades add no value to society. In his buffoonery he does not realize that pension funds, insurance funds, public retirement funds, etc. ALL rely on intraday trades to hedge their positions so the little old ladies, retired workers, and all those others the Congressman so wants to protect don't lose the value of their retirements as the market gyrates up and down on a daily basis.
Our national debt, in less than three months, has more added to it than the prior 43 presidents combined added to the debt with such federal necessities as bee research, maritime museums, schools and new buildings for school districts that already have over a dozen vacant buildings because of population declines.
The Treasury's new power grab.
It is no wonder that with this kind of background we see the Treasury Secretary go before Congress and demand creation of a new federal oversight authority that would basically monitor private businesses, and if the authority determines that they become a risk to the public it would seize and run the business.
They are styling it as 'financial related entities' but what is that? It is a very murky line as you look at the automakers, GM, insurance companies, holding companies, Wal-Mart. What about companies running large credit unions? When times are bad, precisely the time when the law would be enforced, the 'crisis' and the hysteria surrounding it would lead to the government stepping in and seizing any business it wanted to seize. The government has take over several banks by virtue of security interests and despite its rhetoric may never let them go. Government changes contract law about every other week right now so it would not take much addition to the crisis, something that could happen as the Administration bankrupts our country with printed money, for it to pass another rule change.
You have to wonder where the point is that US citizens will finally stand up and quit worrying over $165M in bonuses that Congress approved and start looking at what Congress and the Administration are doing to our country. Maybe then they will issue a 'cease and desist order' in the form of a boycott on funding this out of control action, i.e. taking control of their tax dollars.
家园 THE MARKET MARKET SENTIMENT
VIX: 42.93; -0.3
VXN: 42.17; +0.16
VXO: 43.44; +0.58
Put/Call Ratio (CBOE): 0.76; +0.06
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: 28.4%. Nothing like a rally to bring around the bulls, but not a very big run from 26.4% last week and not even hitting the 29.7% from the week prior. Not a lot of confidence just yet and that is fine. Still 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: 44.3%. Bigger drop for the bears, falling from 47.2%. Very solid 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: -39.25 points (-2.52%) to close at 1516.52
Volume: 1.981B (-9.3%)
Up Volume: 531.349M (-1.569B)
Down Volume: 1.48B (+1.336B)
A/D and Hi/Lo: Decliners led 2.28 to 1
Previous Session: Advancers led 5.11 to 1
New Highs: 15 (+5)
New Lows: 18 (+5)
NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg
Lower, below average volume as NASDAQ gapped lower and basically did nothing all session. While the NYSE large caps cracked positive, NASDAQ never made the effort. It was going nowhere Tuesday no matter what happened. One of the leading indices on the way up was taking a breather regardless and the low volume was good to see. Now we see if it will hold the 1500ish level, the peak on last week's move that capped off the rally off the March low. Plenty of resistance up through 1600, and a couple of days of rest here would give it a point to bounce.
SOX (-2.41%) faded as well after it tested the January high, the post-November peak, on Monday. A rather modest pullback as SOX remains in the upper levels of its trading range. It made a quick test last Thursday and Friday before jumping Monday on the bank plan. It likely needed a bit more rest and it would not hurt it to take more rest here.
NASDAQ 100 CHART: http://investmenthouse.com/ihmedia/NASDAQ100.jpeg
SOX CHART: http://investmenthouse.com/ihmedia/SOX.jpeg
SP500/NYSE
Stats: -16.67 points (-2.03%) to close at 806.25
NYSE Volume: 1.645B (-14.16%)
Up Volume: 277.256M (-1.589B)
Down Volume: 1.358B (+1.311B)
A/D and Hi/Lo: Decliners led 2.01 to 1
Previous Session: Advancers led 7.67 to 1
New Highs: 17 (+3)
New Lows: 94 (+18)
SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg
SP500 faded and is back just over the key range from 800 to 805. That keeps it in the January/February consolidation range, albeit the lower sliver of that range. A key test for the financials and the SP500, but it was also a big run off of that March low, and a two-day pullback last Thursday and Friday was not a full test of that run. It likely was not ready to move again Monday and will need a bit of consolidation to do it, but looking at the financials, they are already getting into position for a new run already.
SP600 (-3.61%) took it on the chin the hardest, falling back through the 50 day EMA and landing on last week's high before the Thursday and Friday pullback. It may go all the way back to the November closing low before it is ready to try a bounce. The small caps are still struggling at getting their act together and showing some economic improvement ahead. About all they have done is rally with the other indices. Not any real leadership yet. Not any fake leadership either for that matter.
DJ30
Faded but showed the best action of the group as well as the lightest losses. Volume was below average for the first session in over a month as DJ30 faded to test and hold the 50 day MA. That keeps it over the November closing low (7552) and in excellent position to continue the Monday break higher. May take another day or two depending upon the rest of the market, but DJ30 actually looks to be in good shape.
Stats: -115.65 points (-1.49%) to close at 7660.21
Volume: 379M shares Tuesday versus 515M shares Monday. Nice below average volume as DJ30 tests back modestly.
DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg
家园 WEDNESDAY Tonight the President campaigns for his massive budget bill that is part of his massive stimulus plan and massive bailout proposals. Massive amounts of debt, so massive that even China is now calling for a currency other than the dollar as the 'world' currency. There was an unwritten promise with the rest of the world after we went off the gold standard that we would not explode our deficit to levels this high. Europeans, the consummate government spenders, ask our leaders and businessmen why we have suddenly gone insane with our spending. With our allies wondering about the Administration's economic acumen it is no wonder our enemies are making public statements about the dollar and our profligate spending.
Will it have a market impact? That is the continual threat hanging over the market these days, i.e. some government program to save the world, some legislation punish a discrete group of hapless saps just trying to do their jobs, or some new massive movement of our government to a more European model. We have said it before: 1% GDP growth is a good year for Europe. Do we want that to be our model? We broke away from Europe 233 years ago to start the most successful economy and country in the world's history. Do we give up all of that because a time of crisis, something we have handled and conquered before?
In any event the market is managing to move higher off its bear market low, able to rise as some more certainty, good or bad, comes into the regulatory and bailout picture. The near term question is whether the indices are ready to move higher already or are still nursing a headache after Monday's premature move (only 2 days of pullback and then whoosh) and need another day or two of rest to lay a better foundation for the second leg higher.
As noted above, there are more and more leaders forming up, taking position to support a further market move. Early leaders are testing back, financials are getting in position to move again, energy remains set up, and commodities in general remain solid. There is leadership at the ready. A day or two more of modestly testing would be great. We will just have to see if the market is ready to deliver. If it is we will move in to catch a run through the end of the month and ahead of earnings season in April.
Support and Resistance
NASDAQ: Closed at 1516.52
Resistance:
1521 is the late 2002 peak following the bounce off the bear market low
1536 is the late November 2008 peak
1542 is the early October 2008 low
1569 is the late January 2009 peak
1598 is the February 2009 peak, the last peak NASDAQ made
1603 is the December peak
1620 from the early 2001 low
1644 from August 2003
1666 is the January 2009 peak
Support:
1505 is the late October 2008 closing low.
1493 is the October 2008 low & late December 2008 consolidation low
The 50 day EMA at 1466
The 50 day SMA at 1462
The 18 day EMA at 1444
1440 is the January 2009 closing low
1434 is the January intraday low
1428 is the mid-November 2008 low
1398 is the early December 2008 low
1387 is the 2001 low
1316 is the November 2008 closing low
1295 is the November 2008 low
1271 from is the March 2003 low, 1253 intraday
1262 from July 2002
1192 is the July 2002 intraday low
1114 is the October 2002 low, the bear market low
S&P 500: Closed at 806.35
Resistance:
815 is the early December 2008 low
818 is the early November 2008 low
The 90 day SMA at 831
839 is the early October 2008 low
848 is the October 2008 closing low
853 is the July 2002 low
857 is the December consolidation low
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:
805 is the low on the January 2009 selloff. KEY Level
The 50 day SMA at 794
800 is the March 2003 post bottom low
768 is the 2002 bear market low
The 18 day EMA at 767
752 is the November 2008 closing low but it is not broken and done away with
741 is the November 2008 intraday low
722 is a December 1996 low
681 is the June 1996 intraday peak, 673-71 closing
665 from August 1996
656-654 from January, April 1996
607-05 from November 1995
Dow: Closed at 7660.21
Resistance:
7694 is the February intraday low
7702 is the July 2002 low
7867 is the early February low
7882 is the early October 2008 intraday low. Key level to watch.
7909 is the early January low
7965 is the mid-November 2008 interim intraday low.
The 90 day SMA at 8046
8141 is the early December low
8175 is the October 2008 closing low. Key level to watch.
8197 was the second October 2008 low
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 50 day EMA at 7616
7552 is the November closing low. KEY Level.
7524 is the March 2002 low to test the move off the October 2002 low
7449 is the November 2008 intraday low
The 18 day EMA at 7318
7282 is the October 2002 closing low in the prior bear market.
7197 is the intraday low from October 2002 bear market
7115 is the February 2009 closing low
7008 from February 1997 closing peak
6528 is the November 1996 peak
6489 from December 1996 closing peak
6356 is the April 1997 intraday low
Economic Calendar
These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.
March 23 - Monday
February Existing Home Sales (10:00): 4.72M actual versus 4.45M expected, 4.49M prior
March 25 - Wednesday
February Durable Goods Orders (8:30): -2.4% expected, -5.2% prior
Durables, Ex-Transportation, February (8:30): -2.0% expected, -2.5% prior
New Home Sales, February (10:00): 300K expected, 309K prior
Crude Oil Inventories, 3/20 (10:30): +1.942M prior
March 26 - Thursday
03/21 Initial Jobless Claims (8:30): 650K expected, 647K prior
Q4 GDP - Final, Q4 (8:30): -6.6% expected, -6.2% prior
GDP Price Index, Q4 (8:30): 0.5% expected, 0.5% prior
March 27 - Friday
February Personal Income (8:30): -0.1% expected, 0.4% prior
Personal Spending, February (8:30): 0.3% expected, 0.6% prior
Michigan Sentiment - Rev, March (9:55): 56.0 expected
家园 THE PLAYS: Play Date: 03/24/2009
ACOR (Acorda Therapeutics--$25.82; -1.15; optionable): Biotechnology
http://biz.yahoo.com/p/a/acor.html
After Hours: $25.82
EARNINGS: 05/06/2009
STATUS: Test breakout. ACOR broke higher out of a pretty ragged 9 week ascending base, surging on strong volume Friday to make the break. ACOR held up pretty well in the hard selling but it was not immune; it used it, however, to form a double bottom and rallied into January. It consolidated in the current base and made that break Friday and then tested it Tuesday on very low, below average volume. Excellent position to break higher after this test as it sits on the peaks in the base. Money flow is surging higher ahead of price. Plenty of room to run overhead. Just waiting for the next break higher.
Volume: 459.509K Avg Volume: 609.857K
BUY POINT: $27.03 Volume=850K Target=$31.95 Stop=$25.45
POSITION: QOR GE - July $25c (63 delta, wide spread) &/or Stock
http://www.investmenthouse.com/cs/acor.html
Play Date: 03/24/2009
BHI (Baker Hughes--$33.47; -0.83; optionable): Oil and gas service company
http://biz.yahoo.com/p/b/bhi.html
After Hours: $33.42
EARNINGS: 01/28/2009
STATUS: Cup w/handle. BHI has formed a 7 week base, its second since bottoming in December. The January to early February base didn't hold, falling back into this base. It gapped over the 50 day EMA (31.49) Thursday, then filled the gap Friday. Bounced right back up to start this week, testing a bit Monday on low trade. May take a couple more days to form the handle better but we can wait. When baker breaks higher it is in great position to rally run.
Volume: 4.541M Avg Volume: 5.388M
BUY POINT: $34.39 Volume=7M Target=$39.95 Stop=$31.98
POSITION: BHI GG - July $35c (44 delta) &/or Stock
http://www.investmenthouse.com/ci/bhi.html
Play Date: 03/24/2009
CYBS (Cybersource--$13.89; -0.19; optionable): Electronic payment, risk management solutions for small business merchants
http://biz.yahoo.com/p/c/cybs.html
After Hours: $13.89
EARNINGS: 01/29/2009
STATUS: Ascending base. CYBS gapped higher in late January on earnings and rallied to the 200 day SMA (now at 13.65), tested back to the 50 day EMA and the twin peaks in December/January and found support. That took it back up to the 200 day and it has spent the past week breaking over and under that level. Strong Monday volume as it broke back over the 200 day. Then Tuesday low volume as it tested modestly back. That hold over the 200 day after the break is solid. Want to be in it as it jumps up off this 200 day on rising trade.
Volume: 597.844K Avg Volume: 775.562K
BUY POINT: $14.42 Volume=1M Target=$16.95 Stop=$13.41
POSITION: CXQ GC - July $15c (44 delta) &/or Stock
http://www.investmenthouse.com/ci/cybs.html
Play Date: 03/24/2009
SMH (Semiconductor Holders Trust--$18.78; -0.49; optionable)
After Hours: $19.33
STATUS: Cup w/handle. Up and down the past week, forming a lateral handle to a 7 week base. This is the last in a series of small bases that formed the December to March trading range. SMH broke higher, clearing the January and February peaks and then trading around them. If the market continues higher from here SMH is in position to run toward the 200 day SMA.
Volume: 13.608M Avg Volume: 15.396M
BUY POINT: $18.55 Volume=18M Target=$21.94 Stop=$17.82
POSITION: SZS ER - May $18c (64 delta) &/or Stock
http://www.investmenthouse.com/ci/smh.html
Play Date: 03/24/2009
SMTC (Semtech--$13.03; -0.43; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/s/smtc.html
After Hours: $13.00
EARNINGS: 03/04/2009
STATUS: Test breakout. SMTC broke higher over the 200 day SMA (12.73) two weeks back, finally making that move after failing in early February. The move was a breakout form its 6 week double bottom base, and you can say this flag that has formed the past two weeks over the 200 day, but now holding solid over some intraday peaks at 13. Range is tightening some and looking for SMTC to make a strong break higher once more off this level.
Volume: 579.853K Avg Volume: 782.644K
BUY POINT: $13.57 Volume=1M Target=$15.95 Stop=$12.74
POSITION: QTU FP - June $12.50c (64 delta, low OI) &/or Stock
http://www.investmenthouse.com/ci/smtc.html