主题：03/11/2009 Market View -- 宁子
家园 03/11/2009 Market View SUMMARY:
- Market clings to some 'day after' gains. Not great, not bad, just typical.
- Cart before the horse: Treasury needs yet another two weeks to announce its plan while we crammed a stimulus plan down in a week without even reading it.
- What LIBOR means to you and indeed everyone in the nation.
- Looking for some more upside but preparing for the downside if the buyers give up and the sellers swarm.
Buyers try to run with the ball again but lack overall enthusiasm.
After a blast higher from a downtrend you can have a couple of outcomes and still remain positive. A further surge on volume is quite a positive indication. A so-so upside day is also workable, and that is pretty much what the market showed Wednesday: an early run, a falter at some resistance, a slide back to flat on lower trade. Not great, but with this market the fact the market did not sell off immediately and on volume was a positive, kind of a moral victory of sorts. Of course moral victories don't put much money in the bank. There were some really good moves from individual stocks, and if quality stocks can continue to move that allows the market to take a breather and try to set up for a follow through to the Tuesday short covering rally.
Techs were pretty solid with NASDAQ 100 leading the market (outside of SOX), aided by AAPL with its announcement of a smaller iPod. Maybe AAPL will lead tech again; it did clear its 50 day EMA on the move. AEO reported surprising earnings and a decent outlook. Treasury's Geithner said he only needs another two more weeks to get that bank plan in place, trotting out a short outline of how it would work.
Other news was not so great. SPLS (office supplies, an indicator of small business) was not so fortunate as it missed. NSM is laying off 850 and will sack another 875 down the road. China's February oil imports fell 18% year/year, and with inventories rising just 749K (less than expected), oil had a tough session, closing down 2.80 at 42.91. LIBOR didn't go up; it didn't go down either. Greenspan wrote an opinion piece saying 'don't blame me' for the housing bubble, saying his absurdly low interest rates had nothing to do with fostering the housing boom then bust. True he had accomplices spanning many years such as the Clinton and Bush Administrations, certain senators and House reps forcing banks to make risky loans, and many of the same in Congress consciously ignoring the warning signs in Fannie and Freddie (Rep Frank and his 'there is nothing wrong with' the GSE's comments).
With that kind of drama the higher open and early move higher the first half hour was not bad. Couldn't keep up the move past that, however. The indices bled back slightly through lunch and then even started a rebound as the afternoon session got underway. The move peaked in the last half hour and faded to flat on NYSE. Techs were the day's leaders along with the chips and financials as the latter continued their rebound move. They need to keep it that way for the rebound attempt to survive, particularly as the small caps continue lagging, putting in a down session and bringing up the rear on the day.
TECHNICAL. Rather blas action intraday with the indices starting higher and moving up from there but then fading basically to flat on the NYSE indices. Somewhat bearish intraday action but quiet as well.
INTERNALS. Matched the session, i.e. flat. Volume was lower but above average. The buyers were not there to really push it and the short sellers were not stepping back in yet. Nothing negative showing up such as negative breadth that would indicate just a very few masking overall weakness. Not a great positive but with this market you have to watch that sort of thing that might show creeping weakness returning.
CHARTS. The index charts did not close that well. The late fade left the NYSE charts showing candlestick doji at the 18 day EMA resistance. The significance of the 18 day EMA is that it is the second level of resistance a stock or index encounters in a continuing downtrend. Really weak indices will stall at the 10 day EMA. If they manage to move through they can still stall at the 18 day, and that is still quite close resistance and still an indication of pervasive weakness. Even NASDAQ and NASDAQ 100 stalled out Wednesday below their 18 day EMA and showed candlestick doji. The SP600 is the only index that didn't, but alas, it stalled out and showed a doji below its 10 day EMA. Pervasive weakness there. Have to be careful here. Typically you have a day off or a light session after a huge rally. That is what we got. The question is what the market does each day here. For the upside to succeed you want the market to hold the gains just as it did. You want to see a follow through session (2% gains, strong volume, strong breadth) Friday through next Wednesday. You want to see SP500 at least get up to 750ish to allow a chance for a renewed bottoming process to start. This rally could be the start of the bottom; NASDAQ, NASDAQ 100 and SOX all held the prior lows. A rally up to that next resistance lets stocks and indices form better bases.
LEADERSHIP. As noted, there were some really good moves in quality leaders that had set up well prior to this rally. While Tuesday was dominated by those stocks jerking back up in their downtrends thanks to the shorts covering up, Wednesday's upside moves were dominated by quality patterns moving higher. AMZN, BR, ISIL, DRIV, FCX, STAR. The strong leaders pick up where the short covering rockets fizzle out. It is important that these stocks lead while the market rests as that allows more good stocks and indeed the indices to set up patterns under their cover. This is part of the surge, pause before a follow through, a follow through surge, another pause, etc.
SUMMARY. It wasn't a great day, but it was not a bad day as the market did not turn over and sell off. The index charts do make you kind of nervy, however, as they show those doji at the next typical resistance point in an ongoing downtrend. Leadership continued higher though not all leaders that surged Tuesday enjoyed the same success Wednesday. That is the nature of trying to dig out of a hole. Keep the stops tight, and if we have to get back in after a dip recovers, so be it.
家园 THE ECONOMY Treasury is snake bit.
Into early February the market was holding up pretty well, working on new patterns and bases in leadership groups such as chips, retail, and more than a few techs. The new Treasury Secretary is outmatched, at least in the public perception. The wheels started to come off with his first major presentation. Everyone was ready for the announcement of the bank plan details. They got a short talk about doing the best they could to get a plan in order. In two weeks we would know the plan. The market started the February selling.
Two weeks later we were told it would take another two weeks. The market was consolidating laterally after that first leg lower, and this news started the next leg lower.
Today the G-man held another announcement about the illusory, fugacious plan. There were some details such as it would involve a public/private partnership where the private sector sets the price. Not bad, but that was all we got. No timeline, no other specifics. All of that will come, all together now, in two weeks. AT LEAST the market did not sell off on this news, yet.
Stimulus could not wait but the bank plan can?
All of this time was needed to come up with this? This is basically the plan that was originally presented by Paulson with some tweaks. We had to have a stimulus package within minutes of the inauguration but no bank plan. Economist after economist and financier after financier agree that no stimulus can work (not even a good stimulus plan which is not what was passed) without fixing the banking and credit markets. Nonetheless there is still no plan for the banks.
Does this show the true intentions behind the stimulus, an inability to get things running, both? Is it, as the chief of staff said, using the crisis and the stimulus as a vehicle to get policy changes? If the economy was really the issue the bank plan would have been in place a week ago given that even the economist the Administration relies upon say the credit and banking systems have to be cured for the economy to grow. If the economy was really the issue Treasury would be fully staffed rather than Geithner and his shadow. Lots of promises similar to no more ear marks, putting legislation online ahead of passage so any citizen, EVEN legislators, could read it before voting on it. What we are getting is more of the same as we always get from Washington. There is no change in the way things are done, just the goals of those in charge.
LIBOR and the TED spread.
A reader asks what the LIBOR rates mean as well as the TED spread. Good time to cover this given the stimulus package, the market's bounce this week, and some optimism getting ginned up about a recovery.
That is why we bring up LIBOR just about every day. LIBOR (London Interbank Offer Rate) is the interbank lending rate between banks when the banks need additional short term cash to fund operations. It is (or was?) a vast, free-flowing method to transfer the funds needed to conduct bank operations and client operations. When things are fine in the financial markets and there is trust among banks, rates are low and spreads are narrow as no one is worried about lending funds to someone that may not be there the next day. Thus the threat of nationalization could mean money lent today could be with a new partner tomorrow or maybe no partner. How that would work out for the banks is not really known for certain and thus there is fear. That is just the ancillary problem. With many financial institutions in dire condition, there is plenty of worry and distrust to pump rates up and spreads higher.
That is where the TED spread comes in. TED is the difference between the 3-month LIBOR and the US 3-month Treasury Bill. This shows how in line the money markets are or are not. When they are close, calm. When the spread is large, something serious is up.
The average back in mid-2006 was 0.36%. Narrow, things are calm. In September after LEH it was 4.34%. Wide. Huge. Right now LIBOR is 1.33% and the 3-month T-bill yield is 0.22. That puts TED as 1.11%. Low compared to September when the unknowns where huge and CDS insurance (Credit Default Swaps) spiked several thousand percent in days. Things were heading off a cliff at that point. That has been avoided.
Now TED shows crisis averted, but still a very sick credit system. Problem is, it is on the rise again thanks to the worries about the Administration's banking policies and its spending plans. Don't believe me? I talk with bankers in Europe and even the socialists are worried about what we are doing. They depend upon us so much, capitalists that we are, that they do not want us to skew too far their way. We have to fund much of the world's largesse and if we head toward the European model (at least 'old Europe' as Rumsfeld said) who will fund things? China is strong but no one is looking for that kind of cooperation with Europse from that nation.
家园 THE MARKET MARKET SENTIMENT
VIX: 43.61; -0.76
VXN: 42.81; -1.02
VXO: 45.55; +0.55
Put/Call Ratio (CBOE): 0.75; +0.02
To recap what we said last Thursday with respect to VIX' failure to spike higher on this most recent selling: VIX does not have to spike higher to signal a bottom. It has done its work already and historically it spikes several months before the actual bottom. In 2002 it spiked to 56, the high, over three months before the October bottom. It has been just over four months since the first spike higher in October and just over three months from the November high that was a closing high in the run.
NASDAQ
Stats: +13.36 points (+0.98%) to close at 1371.64
Volume: 2.227B (-9.31%)
Up Volume: 1.559B (-732.361M)
Down Volume: 636.533M (+511.288M)
A/D and Hi/Lo: Advancers led 1.02 to 1
Previous Session: Advancers led 4.77 to 1
New Highs: 4 (-3)
New Lows: 107 (-79)
NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg
Another move higher but not much of one, up to the 18 day EMA (1382) on the high and then a modest fade. This also took it up to the December low, a double resistance point. Already a key test for the techs after two days. Tech was the leader Wednesday, aided by some large cap moves. If NASDAQ is serious it can hold on here another day but then needs to show more upside force off of this November low. If it comes back and stalls in this area, bad sign. Thus far a good start and for the upside you want to see it hold the gains and then show another strong upside move early next week.
NASDAQ 100 (1.21%) gapped up and ran through the 18 day EMA (1126) but also faded to close, this time right on it. This puts them at the January low as well, similar to NASDAQ. Need the large caps to lead the way here. They can pause as well but not retrace much before another big move.
SOX (2.00%) gapped higher and managed a close above the 50 day EMA. Right below some resistance at 213, and there is still the important 225 after that. Lots of resistance but also the best pattern, having held the February and early March low. Can help lead the way higher as it did in late 2002.
NASDAQ 100 CHART: http://investmenthouse.com/ihmedia/NASDAQ100.jpeg
SOX CHART: http://investmenthouse.com/ihmedia/SOX.jpeg
SP500/NYSE
Stats: -1.76 points (-0.24%) to close at 721.36
NYSE Volume: 1.745B (-18.58%)
Up Volume: 1.046B (-1.061B)
Down Volume: 677.225M (+599.178M)
A/D and Hi/Lo: Advancers led 1.51 to 1
Previous Session: Advancers led 8.69 to 1
New Highs: 5 (-3)
New Lows: 125 (-33)
SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg
Rallied up near the 18 day EMA (738, 732 on the high) and then gave it all back. A doji below the 18 day EMA leaves you less than warm and fuzzy after all rallies thus far have failed and failed quickly. The downside has been so severe, however, you sense it could hold and continue on up to that first real test at 741 and more realistically, 752 the November closing low. Similar to NASDAQ, it needs to hold the gains then make the next break higher. If not we will have some downside plays to throw at it.
SP600 (-0.05%) again lagged the market as the economically sensitive small caps show no inclination to rally. SP600 has not even closed over the 10 day EMA. Tried the move Wednesday and made it, but then gave it up, showing something of a shooting star doji after a short bounce. Note this is its first real bounce to test its 10 day EMA since mid-February when the leg started in earnest. They could rally if the rest of the market pulls back up, but if not it could be a very ugly next leg. Will have a downside play here as well.
DJ30
Similar NYSE chart pattern with a doji below the 18 day EMA, tapping toward it (not at it) on the high. Likely just a pause after a big move, nothing more. After such a clubbing you would think so. Hey, at least it should get up to 7500 and the November lows (7449 intraday, 7552 closing).
Stats: +3.91 points (+0.06%) to close at 6930.4
Volume: 524M shares Wednesday versus 640M shares Tuesday. Good volume for a pause in that it was lower, but still very high volume suggesting some churn. Have to be careful both directions here.
DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg
家园 THURSDAY News, outside of really bad or really good, is not likely to drive the market just now. It is on a technical move, an oversold bounce that was brewing after such a gutting the past month as the indices put in two downside legs after the consolidation failed in early February. The market should bounce more from here. If it does not, it is massively weak and 5000 suddenly seems not only reachable, but a level we might be happy to be at.
The major indices closes was suspect with the dojis below the 18 day EMA, but we still have to give more nod to the upside given the harsh selling, the strong rebound, the tech and chip leadership. Doesn't mean it will happen. They may be flat wrong as they were in January before the February breakdown when they looked quite good and then not so good after that drop to the bottom of the range to start the year.
We have some great upside plays moving well. Others are recovering, and if they continue to recover we will let them. If they struggle, cut the cord. We will continue to look at some upside plays; after a pause for another day or two where the market holds its gains and it will be ready for another move higher. That break could give us some good buys and might even be foreshadowed by some leaders moving out ahead of the pack.
Just in case we are putting some downside on the play list as well. There are still bearish set ups despite all of the selling and the relatively short bounce to this point. We don't want to rush in on the first tick lower; things are still oversold on a relative basis. If the market continues to move laterally or just slightly lower in a pause after the run, we don't want to barrel in on the downside. Let it make its test and if it rolls over hard on stronger volume the downside game is likely back on. Possible transition time and still a very oversold condition, so again, we need to be careful about jumping in too quickly to the downside. Some test buys of partial positions yes, but not loading the boat just yet.
Support and Resistance
NASDAQ: Closed at 1371.64
Resistance:
The 18 day EMA at 1382
1387 is the 2001 low
1398 is the early December 2008 low
1428 is the mid-November 2008 low
1434 is the January low (1440.86 closing)
1460 is the February low
The 50 day EMA at 1464
The 50 day SMA at 1484
1493 is the October 2008 low & late December 2008 consolidation low.
The 90 day SMA at 1510
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
1565 is the second low in October 2008
1569 is the late January 2009 peak
1603 is the December peak
1620 from the early 2001 low
1644 from August 2003
1666 is the January 2009 peak
Support:
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 721.36
Resistance:
722 is a December 1996 low
The 18 day EMA at 738
741 is the November 2008 intraday low
752 is the November 2008 closing low
768 is the 2002 bear market low
800 is the March 2003 post bottom low
The 50 day EMA at 800
804 is the low on the January 2009 selloff
812 is the February low
815 is the early December 2008 low
818 is the early November 2008 low
839 is the early October 2008 low
The 90 day SMA at 847
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:
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 6930.40
Resistance:
7008 from February 1997 closing peak
The 18 day EMA at 7097
7115 is the February 2009 closing low
7197 is the intraday low from October 2002 bear market
7282 is the October 2002 closing low in the prior bear market.
7449 is the November 2008 low
7524 is the March 2002 low to test the move off the October 2002 low
7694 is the February intraday low
7702 is the July 2002 low
The 50 day EMA at 7702
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.
8141 is the early December low
8175 is the October 2008 closing low. Key level to watch.
8197 was the second October 2008 low
The 90 day SMA at 8215
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:
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 10 - Tuesday
January Wholesale Inventories (10:00): -0.7% actual versus -1.0% expected, -1.4% prior
March 11- Wednesday
03/06 Crude Oil Inventories (10:30): +749K actual, -757K prior
Treasury Budget, February (14:00): -$192.8B actual -$200B expected, -$175.6B prior
March 12 - Thursday
Initial Jobless Claims (8:30): 644K expected, 639 prior
Retail Sales, February (8:30): -0.5% expected, 1.0% prior
Retail Sales ex-auto, February (8:30): -0.1% expected, 0.9% prior
Business Inventories, January (10:00): -1.0% expected, -1.3% prior
March 13 - Friday
February Export Prices ex-ag. (8:30): -0.0% prior
Import Prices ex-oil, February (8:30): -0.8% prior
Trade Balance, January (8:30): -$38.2B expected, -$39.9B prior
Michigan Sentiment-Preliminary, March (10:00): 56.3 expected, 56.3 prior
- 复 THURSDAY
家园 THE PLAYS: Upside:
Play Date: 03/11/2009
ICE (Intercontinental Exchange--$62.69; +2.17; optionable): Energy exchange
http://biz.yahoo.com/p/i/ice.html
After Hours: $62.59
EARNINGS: 05/05/2009
STATUS: Double bottom. After tanking to start the year ICE made a pair of bottoms, one in January and another in late February. Indeed, it made a smaller double bottom in late February and rallied up to this week, working laterally the pat three days just over the 50 day EMA (61.63) it broke on the close today. Looking for a strong breach higher with some rising volume to give us an entry point.
Volume: 2.129M Avg Volume: 2.368M
BUY POINT: $63.31 Volume=3M Target=$72.85 Stop=$58.91
POSITION: ICE DL - Apr. $60c (68 delta) or ICE FM - June $65c (58 delta) &/or Stock
http://www.investmenthouse.com/ci/ice.html
Play Date: 03/11/2009
MBT (Mobile Telesys--$25.77; -2.17; optionable): Russian wireless
http://biz.yahoo.com/p/m/mbt.html
After Hours: $26.48
EARNINGS: 03/11/2009
STATUS: Cup. A bit ragged, but a definite cup base from early January to the present with a strong break higher Tuesday over the 50 day EMA (25.32) that held MBT back in mid-February. Sold back Wednesday on lower trade, closing over the 50 day EMA. Looking for a renewed bounce off of there to give us our buy point as it resumes the break higher after testing the Tuesday break over resistance.
Volume: 2.776M Avg Volume: 2.312M
BUY POINT: $26.11 Volume=3M Target=$31.95 Stop=$24.55
POSITION: MBT FE - June $25c (64 delta) &/or Stock
http://www.investmenthouse.com/ci/mbt.html
Play Date: 03/11/2009
MCHP (Microchip--$19.67; +0.75; optionable): Semiconductors
http://biz.yahoo.com/p/m/mchp.html
After Hours: $19.72
EARNINGS: 01/29/2009
STATUS: Ascending base. Set up a double bottom with handle that we wanted to play earlier, but never gave the breakout. Instead MCHP faded through the last three weeks of February on into this week. It didn't break down, just faded. It hold the late December consolidation range and then gapped higher Wednesday on huge trade, clearing the 50 day EMA (19.01). Showing a doji after the gap, but really like the break. Now we have a feeling that MCHP will test back some tomorrow after this gap. We are looking for a test of the 90 day SMA (19.19) where it tapped and bounced Wednesday. On another test in that general range and we pick it up on the rebound move.
Volume: 8.84M Avg Volume: 4.626M
BUY POINT: Test 19ish and then $19.22 on the bounce. If it doesn't go that far, that is okay. Volume=5M Target=$23.44 Stop=$18.94
POSITION: QMT DW - Apr. $17.50c (79 delta) or QMT GD - July $20c (56 delta) &/or Stock
http://www.investmenthouse.com/cd/mchp.html
Downside:
Play Date: 03/11/2009
AMGN (Amgen--$47.27; -1.07; optionable): Biotechnology
http://biz.yahoo.com/p/a/amgn.html
After Hours: $47.27
EARNINGS: 01/26/2009
STATUS: Downside. Fell like a rock from the sky to end February as AMGN hit freefall. It checked up at 46, just below the October lows (the lows for AMGN on this selling). Rebounded Tuesday, tried to continue higher Wednesday, but after clearing the nearest resistance at the 10 day EMA (48.82), it gave it right back up and rolled to a loss on stronger volume. Not enjoying the gains and looking to play AMGN down for another run given it blew out its prior low on this last move. A move to the target lands a 41%ish gain.
Volume: 11.208M Avg Volume: 8.525M
BUY POINT: $47.05 Volume=9.5M Target=$44.55 Stop=$47.91
POSITION: AMQ PW - Apr $47.50p (-46 delta)
http://www.investmenthouse.com/ci/amgn.html
Play Date: 03/11/2009
DTV (DirecTV Group--$20.06; +0.06; optionable): Satellite TV
http://biz.yahoo.com/p/d/dtv.html
After Hours: $20.30
EARNINGS: 02/10/2009
STATUS: Test breakdown. Gapped lower mid-February after earnings. With the help of the market selloff DTV tumbled down to 19, holding over the October and November lows at 18. Bounced Tuesday and again Wednesday, but after moving through the 18 day EMA (20.50) intraday it rolled over to flat. Low volume on that move. Looking for it to turn back down off of this doji. Want to see some significant volume to give us the entry.
Volume: 11.226M Avg Volume: 10.518M
BUY POINT: $19.86 Volume=14M Target=$18.35 Stop=$20.55
POSITION: DTV PD - Apr. $20p (-44 delta)
http://www.investmenthouse.com/ci/dtv.html
Play Date: 03/11/2009
IWM (Ishares Russell 2000--$36.68; +0.05; optionable)
After Hours: $36.69
STATUS: Resistance at 10 day EMA. Putting this one on in the event the bounce had a small gas tank and rolls over from here. IWM (small cap Russell 2000) hit the 10 day EMA (37) and failed to hold the break over that level. Showing a candlestick chart doji, an indication a move can be over. Yes it is a small bounce after a thrashing the past three weeks and it may be too early to enter. Maybe. The small caps are so weak they may not make any more headway.
Volume: 82.276M Avg Volume: 71.481M
BUY POINT: $36.32 Volume=90M Target=$34.05 Stop=$36.88
POSITION: IWM PK - Apr. $37p (-47 delta)
http://www.investmenthouse.com/ci/iwm.html