Nasdaq closed 1,552.03 for the week ended 24th Oct 08, down 159.26 points or 10.26% from previous week.
S&P500 closed 876.77 for the week ended 24th Oct 08, down 63.78 points or 6.78% from previous week.
Crude oil price finished the week at US$63.94/barrel as compared with previous week of US$71.80/barrel.
A recap of last week economic data/event is as followed.
- 23rd Oct 08, Jobless Claims reported 478K, market expecting 470K and previous value was 461K.
- 24th Oct 08, Existing Home Sales came in 5.180M, market consensus 4.920M and previous value was 4.910M.
- 27th Oct 08, New Home Sales
- 28th Oct 08, Consumer Confidence
- 29th Oct 08, Durable Goods Orders, FOMC Announcement
- 30th Oct 08, GDP ( 3Q08 revision ), Jobless Claims
- 31st Oct 08, Employment Cost Index, Personal Income/Outlays, Consumer Sentiment
Technically, mid to long term, DJI still in a downward trend but short-term wise it appeared to be bottoming. Even though DJI dropped 5.35% for the week, the spread of DI+ and DI- did not widen and with ADX maintaining at 40 level, this process could be a consolidating stage for the next movement. MACD did not managed to cut up and remained flattish, could be signaling for a bottoming process. RSI remained flattish around the 30% level despite a 5.35% drop in DJI, indicating short-term downside could be limited. Stochastic signals though retracting towards the 20% level but still able to maintain above it. The current support at 8,000 level looked fairly strong as DJI did not hit below that for the whole of last week. Any upside for a rebound would probably cap at the 9,200 level for the time being.
The mid to long term trend for Nasdaq is still down but short-term wise, might see some bottoming. DI+ and DI- slightly expanded its spread and with ADX above 40 level, this signals the downside is more bias than upside. Though a drop of 10% for the week, MACD still able to remain flattish and this could signal a bottoming is in the process. RSI remained fairly consistent around the 30% level, could be signaling downside limited for the time being. Stochastic touched the 20% level and might take another 1 or 2 sessions to see some rebound up perhaps. Nasdaq did break the 1,546 level ( support for past few sessions ) last Friday on intra-day but managed to close around this level and this could mean the 1,546 level is fairly strong at the moment. Any upside due for a rebound rally could be capped at the 1,778 to 1,948 level.
The trend for S&P500 for short to long term is pretty much inline with that of DJI and Nasdaq. DI+ and DI still maintain negatively spaced and with ADX above 40 level, the downside is stronger than any upside. MACD remained flattish despite a 6% drop for the week and this could signal a bottoming in process. RSI remained fairly constant around the 30% level perhaps limiting the downside in short-term. Stochastic reacted with a 6% drop for the week by pulling back to the 20% level and might take another 1 or 2 sessions to see some rebound up. Support wise, S&P500 seems to be able to hold well around the 850 level and any upside due for a rebound would probably cap at the 1,000 level.
The coming week would be an important week for US. FOMC meeting, 3Q08 GDP number, Corporate earnings and US Presidential election round the corner, any unexpected events/news could again make the markets volatile again. Majority of the analysts are expecting US Federal Reserve to cut its interest rate by another 0.5% to 1.0% 0n 29th Oct 08 and they also expecting the GDP number to reflect contraction and perhaps dip into negative figure. US Government already starting to utilize the US$700b rescue package and a second stimulus package is also being proposed to help ease the country's ailing economy. With crude oil price possible to drop to US$50/barrel, inflation is not so much worry at the moment hence giving some rooms for US Fed to cut the interest rate to rescue its economy in the short-term. If all the events/news in the coming news are of positive nature, this should be able to calm the market temporary and perhaps enjoy a oversold rebound or relief rally.
