Nasdaq closed 2,367.52 for the week ended 29th Aug 08, down 47.19 points or 1.95% from previous week.
S&P500 closed 1,282.83 for the week ended 29th Aug 08, down 9.37 points or 0.73% from previous week.
Crude oil price finished the week at US$115.46/barrel as compared with previous week of US$114.59/barrel.
A recap of last week economic data/event is as followed.
- 25th Aug 08, Existing Home Sales reported 5.00M, market consensus 4.94M and previous value 4.86M.
- 26th Aug 08, Consumer Confidence came in 56.9, previous value 51.9 and market expectation was 53.0.
- 26th Aug 08, New Home Sales reported 515,000 with market expecting 525,000 and previous value of 530,000.
- 27th Aug 08, Durable Goods Orders came in 1.3%, market consensus 0.1% and previous value of 0.8%.
- 28th Aug 08, GDP 2Q08 ( 2nd revision ), reported 3.3%, market expecting 2.7% and previous value of 1.9%.
- 28th Aug 08, Jobless Claims reported 425K, previous value of 432K and market expectation 427K.
- 29th Aug 08, Personal Income reported -0.7%, market expecting -0.1% and previous value of 0.1%. Consumer Spending reported 0.2%, market expecting 0.2% and previous value of 0.6%
- 29th Aug 08, Consumer Sentiment came in 63.0, previous value 61.2 and market consensus 62.0
- 2nd Sep 08, ISM Mfg Index
- 4th Sep 08, BOE, ECB announcement, Jobless Claims, Productivity and Costs, ISM Non-Mfg Index
- 5th Sep 08, Employment Situation
US markets fell in the early part of the week due to worry about the health of mortgage-finance and housing markets. In the later part of the week, US markets rebound due to better than expected economic data like Durable Goods Orders, 2Q08 GDP figure and Jobless Claims. However on Friday a weak Personal Income and Outlays data gave back portion of the gain. Meanwhile crude oil price rose to almost US$120/barrel in the middle of the week concerned by Hurricane Gustav could hurt the Gulf of Mexico refineries area.
Technically, DJI is still trying to move back to within its ascending triangle formation with DJI finished the week at a level slighly below the 50d EMA. Looking at the ADX indicator, the DI+ is still above the DI- hence limited the downside for the near-term. MACD is flat around the zero line indicating not much of a direction for the DJI. RSI looks to be moving downward to the 30% level with the Friday drop but the downside could be limited given that Stochastic indicator has not cut down and resting around the 50% level. The breaking out of the ascending triangle will be the level 11,800 ( also the 100d EMA level ) and immediate target will be the 200d EMA level at around 12,200. A breakdown from the ascending triangle formation will lead the DJI to re-test the 10,800 level.
The tech heavy Nasdaq closed below the 50d EMA level after failing to break the 200d EMA level on 28th Aug 08. The weak session on Friday 29th Aug was mainly due to a gloomy earnings report from Dell after Thursday's close. Looking at the ADX indicator, the DI+ has slightly cut down to the DI-, giving a short-term downtrend signal. MACD signal shows no sign of converging up and with MACD histogram still in the negative region. RSI moving down towards the 30% level indicating more downside to come in near-term however the downside might be limited due to the Stochastic signal still has not cut down yet to the 20% level. If there was a follow through on the 28th Aug rally, the potential of cup-handle formation breakout would be high but with Friday's drop and relatively bearish indicators for short-term, the "handle" portion of the cup-handle formation might not be able to form. Breaking down at this point of time will lead the Nasdaq to re-test the 2,200 level. A rally up in the coming week and breaking out of the 2,475 level will reinforce the cup-handle formation.
S&P500 closed below the 50d EMA level for the week and again failed to break the psychological resistance level of 1,300. MACD is flat at the zero line and RSI looks to be moving down to the 30% level indicating short-term it is still in downtrend. However, the downside could be limited as the DI+ still above DI- in the ADX chart and coupled with Stochastic has not cut down, lying around the 50% level. The immediate resistance for S%P500 is the psychological 1300 level and if a breakdown occurs with heavy volume, it might fall to re-test the 1200 level.
