Nasdaq closed 1,649.51 for the week ended 10th Oct 08, down 297.88 points or 15.30% from previous week.
S&P500 closed 899.22 for the week ended 10th Oct 08, down 200.01 points or 18.20% from previous week.
Crude oil price finished the week at US$79.84/barrel as compared with previous week of US$93.22/barrel.
A recap of last week economic data/event is as followed.
- 7th Oct 08, Consumer Credit reported -US$7.9B with market expecting US$5.5B and previous value of US$4.5B.
- 8th Oct 08, BOE cut interest rate by 50 basis points to 4.5% in a coordinated effort help ease the global financial crisis.
- 8th Oct 08, Pending Home Sales came in 7.4% as compared with previous value of -3.2%.
- 9th Oct 08, Jobless Claims reported 478K, market consensus 480K and previous value of 497K.
- 10th Oct 08, Import Price reported -3.0%, market expecting -2.5% and previous value of -3.7%. Export Price reported -1.0% with previous value of -1.7%.
- 10th Oct 08, International Trade came in -US$59.1B, market consensus -US$59.0B and previous value of -US$62.2B.
- 15th Oct 08, PPI, Retail Sales
- 16th Oct 08, CPI, Jobless Claims, Industrial Production
- 17th Oct 08, Housing Starts, Consumer Sentiment
Wall Street started the week already under selling pressure even though the revised bailout bill was passed by the House of Representatives on the previous Friday. Investors were concerned of whether the US$700b was enough and how it was being used. The sentiment did not get better as the week progressed by. By mid-week, global markets were down as much as at least 5% from previous week and even with the coordinated effort by all the central banks in the world to cut interest rate, the sentiment still remain weak. Basically, people were fear of recession, a global recession due to the massive blew out of the financial crisis and there wasn't any immediate solutions that could assure investors that the worst was over and the crisis stop spreading. Fear and panic has caused US markets dropped at least 15% for the week.
Technically, mid and long term trend for DJI were down. Short-term wise, might see some bottoming and relief rally. The DI+ and DI- are still negatively spaced and ADX is moving up towards 40 level indicating the downside is gaining more momentum. MACD still falling and no sign of reversal yet. Some refiefs were from the RSI and Stochastic indicators. RSI and Stocashtic look like turning up for a short-term relief rally. In candlestick indicator, on Friday, DJI managed to rebound from below 8000 level to close almost same level as opening forming a doji formation. This could be a potential sign of rebound in the progress. Any rebound will probably capped at around 10,400 level; a level which DJI failed to hold and plunge breaking 10,000, 9,000 and even 8,000 psychological level within 1 week. The immediate support for DJI would be the 8,000 level which held up pretty well on Friday session.
Nasdaq's mid and long term trend also looking down. Short-term wise might see some bottoming and relief rally in place. The DI+ and DI- still negatively spaced and with ADX at 50 level, the strength of the downtrend is pretty strong. MACD still falling and no sign of reversal. However, RSI and Stochastic indicators look to provide some relief as both indicating a possible turning up in short-term. Any upside probably would be capped at near the 1,950 level ( moving up to cover the gap ) and immediate support is around the 1,550 level.
Like DJI and Nasdaq, S&P500 mid to long term trend is down. Short-term wise, might see some rebound as a form of relief rally. DI+ and DI- are negatively spaced with ADX moving towards 50 level indicating the general downtrend is of strong strength. MACD signal still falling without any sign of possible reversal. The relief indicators were from both RSI and Stochastic as both showing sign of turning up, a rebound from oversold. Any rebound upside would be capped at around the 1,100 level in which S&P500 broke in the early part of the week and send the index breaking the 1,000 and 9,00 level within a week. The immediate support level would be around the 840 level.
Despite a coordinated effort by US Federal Reserve, European Central Bank, Bank of England, HongKong Central bank, China Central Bank, Korea Central Bank, etc to cut interest rate to try to ease the financial issue, global markets still subjected to plunge for the whole week as the LIBOR is still moving up, banks are still unwillingly to lend to each other in fear of unable to get back the loan. US President has concluded a meeting with G7 Finance Ministers to pledge to help solve or contain the crisis as soon as possible and prevent equity markets around the world from further plunging. There were also a G20 meeting over the weekend ( G7 + world's biggest developing countries ) to pledge global effort in containing the crisis. IMF and World Banks were also having meeting over the weekend to address the same issue. Global markets were faced with fear and panic, fear of global recession, fear of repetition of the Great Depression in 1929. The felling stock prices around the world could also be a revaluation of the countries' economy and corporate earnings looking forwards to next year. There were also news that Japan is preparing to use its large reserve in US$ to loan to banks around the world to ease the credit crunch issue. Whatever the measures taken by the global leaders, the important thing now is to bring calm back to the markets, ensure whatever steps taken could stabilize the global markets.
