主题：1/4/2009 Market View -- 宁子

SUMMARY:

- Lots of 'little' news, a modestly lower session to start the new trading year.

- Stimulus package changes its shape over a Hawaiian Christmas, but the added tax cuts are not the kind of tax cuts that stimulate a lot of growth.

- The next step: how the market responds to this first of the year test.

Stocks cannot build on Friday's first of year gains, but they do no damage.

There was a lot of news out Monday, but not a lot of it market moving, just a lot of Monday morning, first of year noise. AAPL faithful let out a collective 'whew!' after Steve Jobs issued a personal letter letting everyone know that his wraith-like look was a treatable hormonal problem versus the return of his cancer or some other life threatening disease. He can stay at the helm as he receives treatment. Apple gapped higher and posted a 4.22% gain, but one good apple could not ripen up the whole barrel of NASDAQ stocks. Came close, however.

Obama came back from a 'meli kalikimaka' Christmas with an idea to make 40% of his stimulus package tax cuts. That was an early positive, but the tax cuts are not the best kind to create real stimulus. Despite what some republicans think, not all tax cuts are created equal when it comes to creating real economic growth. The New York Fed announced it has started buying mortgage backed securities under its TALF plan. The common comment about that was 'about time.' Analysts were active to start the year with some downgrades (VZ, T), upgrades (AMZN, ALTR), and target cuts (C, JPM). There were more, but does it really matter right now when the market is talking to you? LIBOR was basically flat. The dollar rose sharply (1.3614 versus 1.3854 Friday, and down from over 1.4 last week). Oil was up again, however, despite the lower dollar (48.42, +2.08). Gold gapped lower but closed well off its low (859.70, -19.80).

Stocks started weaker but off their pre-market lows, then immediately fell lower. Then a move up through lunch and then into early afternoon that actually turned SP500 positive; twice. NASDAQ and DJ30 pulled up to the flat line. In the afternoon they could not hold, however and all but SOX (+0.62%) closed with rather modest losses. After the market advanced 5 out of 6 of the prior sessions, there was not a lot of upside interest on Monday overall, but there was a lot of interest in metals, energy, materials, and other commodities. That still suggests some overall positive views of the economy.

TECHNCAL. Intraday the market tried to move positive and in fact SP500 did make it to the green but could not hold the move, tailing off in the afternoon. The indices finished about where they started the session, however, so no really negatives taken from the afternoon fade.

INTERNALS. Volume was up on a downside session, and you can look at that as some distribution. On the other hand, volume was still light overall, coming in below average, and on NYSE it was at the Wednesday levels. No major surge as stocks showed some weakness. Moreover, up volume topped down volume on both NASDAQ and NYSE. Breadth was positive on both exchanges as well despite lower closes. The indices were dragged lower by some big names, but more stocks were up than down. This data shows some internal strength remains even though the first real trading day of 2009 closed lower.

CHARTS. The indices finished lower, but they all showed a nice tap toward the 50 day EMA on the low followed by a bounce back to near flat. Not a powerful rebound, but a good easy test of the break over the 50 day EMA last week. Considering it was the first of the year and there could have been sellers storming in after a week of low volume gains, this was not bad action at all, just a pretty orderly test of that prior upside move.

LEADERSHIP. Metals were strong again as well as energy of all types and materials. More of the infrastructure trade even with 40% tax cuts in the stimulus package here at home. China has its own stimulus package and the commodities suggest it will work to revive the dragon. Chips were flat to mixed. Techs were the same. Small caps struggled some, but the index bounced off its 50 day EMA as well. As with all of the indices, there was no real damage done, and to test the 50 day EMA and then hold basically flat was good to see.

SUMMARY. Once more, this was not bad action. After moving higher early stocks tested last week's break over the 50 day EMA and easily held. No breakdowns. Positive breadth. Up volume topped down volume. The first real day of trade for 2009 did not upset the rally to this point, and that in itself is a good start.