Nasdaq closed 2,261.27 for the week ended 12th Sep 08, up 5.39 points or 0.24% from previous week.
S&P500 closed 1,251.70 for the week ended 12th Sep 08, up 9.39 points or 0.76% from previous week.
Crude oil price finished the week at US$101.05/barrel as compared with previous week of US$106.70/barrel.
A recap of last week economic data/event is as followed.
- 9th Sep 08, Pending Home Sales Index reported a drop of 3.2% in July as compared with previous drop of 4.7%.
- 11th Sep 08, Import Prices came in -3.7% with market consensus of -1.7% and previous value of 1.7%. Export Prices reported -1.7% as compared with previous reading of 1.4%.
- 11th Sep 08, International Trades reported -US$62.2B with market expecting -US$58.0B and a previous value of US$56.8B.
- 11th Sep 08, Jobless Claims reported 445K, market consensus 440K, previous value of 444K.
- 12th Sep 08, PPI came in -0.9% with market expecting -0.5% and a previous value of 1.2%
- 13th Sep 08, Retail Sales came in -0.3% with market consensus of 0.3% and previous value was -0.1%.
- 13th Sep 08, Consumer Sentiment reported 73.1, market expecting 64.0 and previous value was 61.70.
- 15th Sep 08, Empire State Mfg Survey, Industrial Production
- 16th Sep 08, CPI, FOMC Announcement
- 17th Sep 08, Housing Starts
- 18th Sep 08, Jobless Claims
For the coming week, investors will be monitoring the outcome of the fire sale of Lehman Brothers. As of this moment, Bank of America Corp and Britain's Barclays Plc have emerged as the front runners for the bank. An outcome is expected before Asian markets open trading on Monday morning. A satisfactory outcome should have bring a relief rally to the global markets like the case of Fannie Mae and Freddie Mac. FOMC decision on the interest rate on 16th Sep 08 with majority expecting a holding should also bring some relief rally to the markets. Perhaps the most important data of all would be the Housing Starts on 17th Sep 08. An improved figure would deem to see the housing market in US coming to an bottom. Crude oil price is currently hovering around the US$100/barrel level. While some believe the downward correction could bring down the price to US$80/barrel, others believe it is also about time for it to rebound up with probably resistance around the US$120/barrel level.
Technically, DJI has no strong sign of a strong rally up or a heavy breakdown, indicators were mainly showing flattish signals. The DI+ and DI- are touching each other with DI+ could be cutting up or remain down with reference to DI-. The ADX signal is at below 20 level hence indicating any trend ( up or down ) would not be of moderate strength. MACD remained flattish around the zero line; lacking of direction. RSI and Stochastic are hovering around the 50% level with no indication of dropping down to oversold region or rallying up to overbought region. The immediate resistance for DJI would be the 50d EMA level at 11,536 and a much stronger resistance would be at the 100d EMA of 11,794 level. The downside would be the support at 10,800 level.
Nasdaq looking likely to have a oversold rally in the next few sessions. MACD signal start to showing sign of converging up. Stochastic signal cut up and moving up from oversold position and RSI stay relatively flat at the 30% level. A strong rally would only possible if DI+ is managed to cut up to DI- in the ADX chart. Any rebound from Nasdaq would be faced with resistance at the 50d EMA level of 2,338. Current support for the Nasdaq is at the 2,167 level.
S&P500 also looks likely will have an oversold rebound in the coming sessions. MACD signal start converging up, Stochastic cut up and moving up towards the 50% level. RSI stay slightly below the 50% level. DI- looks like cutting down while DI+ is cutting up, a crossover between DI+ and DI- would be a possible indicator of more upside to come. Currently, S&P500 is well supported by the 1,200 level, immediate resistance would be the 50d EMA level at 1,278. As S&P500 consists of mostly financial stocks and if the outcome of Lehman Brothers is well accepted by the market, a re-testing of the 1,300 level ( around the 100d EMA level ) is highly possible.
