Nasdaq closed 2,414.71 for the week ended 22nd Aug 08, down 37.81 points or 1.55% from previous week.
S&P500 closed 1,292.20 for the week ended 22nd Aug 08, down 6 points or 0.46% from previous week.
Crude oil price finished the week at US$114.59/barrel as compared with previous week of US$113.77/barrel.
A recap of last week economic data/event is as followed.
- 19th Aug 08, Housing Starts reported 0.965M, market consensus 0.950M and previous value 1.066M.
- 19th Aug 08, PPI reported 1.2% with market expecting 0.5% and previous value of 1.8%.
- 21st Aug 08, Jobless Claims came in 432K with market expecting 448K and previous value of 450K.
- 25th Aug 08, Existing Home Sales
- 26th Aug 08, Consumer Confidence
- 27th Aug 08, Durable Goods Orders
- 28th Aug 08, 2Q08 GDP ( 2nd revision ), Jobless Claims
- 29th Aug 08, Personal Income/Outlays
The early part of the week, US markets were under great selling pressure due to Fannie Mae and Freddie Mac were considered to be on the verge of needing to be rescued by US Treasury, rebound of crude oil price to around US$120/barrel and worse than expected economic data. However, a turnaround on Friday session due to crude oil price retracting US$5/barrel, Lehman Brothers possible being sold and US Federal Reserve Chairman Ben Bernanke's believes that inflation will moderate this year and next and possible interest rate will remain unchanged for rest of the year, helped US markets to recover some of the losses in early part of the week. For the coming week, US markets direction will again be lead by crude oil price, economic data and the health of the finance sector.
Technically, DJI has broken down from the ascending triangle formation in the early part of the week and last Friday's rally managed to squeeze it back to the ascending triangle formation hence preventing it from heading down to its breakdown target of 10.800 level. MACD is flat at the zero line. RSI moving up towards the 70% indicating might have more upside for DJI. Stochastic has cut up and moving towards 50% level. ADX is trying to cut up showing downside for the moment is limited. DJI is now at the 50d EMA level and could be heading up to re-test the 11,800 level; the top of the ascending triangle. If it is able to breakout from there, potential target will be the 100d and 200d EMA level at 11,821 and 11,930 respectively. If DJI is able to range within the ascending triangle formation the coming week, the downside would be limited but if it breaks down from the ascending triangle formation again, the target of breakdown will be 10,800 level.
Nasdaq closed around the 200d EMA level after falling to the 50d EMA level and potentially formed the handle of the cup-handle formation. A breakout at the 2470 level ( top of the cup ) will have a classic cup-handle breakout rally with potential target at around 2740 level. In the ADX, DI+ is above DI- restricting downside for the moment but the ADX line is around the 20 level, doesn't show any sign of a strong rallying up in near term. MACD still in positive region. RSI recovered to hit the 70% level and Stochastic showing sign of cutting up should give Nasdaq some more upside for the coming week. Due to the strength in the indicators, downside for the moment for Nasdaq would be at the 50d EMA level of around 2350.
S&P500 in the early part of the week has fallen out of the v-shape recovery line but last Friday session just managed to crawl back to the line and closed around the 50d EMA level of 1290. Looking at the ADX, DI+ is trying to cut up to DI-, RSI moving towards the 70% level and Stochastic has cut up and is around the 50% level. This indicates S&P500 could have limited downside ( 1250 level ) for the meanwhile and potential upside would meet with resistance at the 100d EMA level of around 1320. A full v-shape recovery will see S&P500 re-test the 200d EMA level at around 1350.
