Nasdaq closed 1,516.85 for the week ended 14th Nov 08, down 130.55 points or 7.92% from previous week.
S&P500 closed 873.29 for the week ended 14th Nov 08, down 57.7 points or 6.2% from previous week.
Crude oil price finished the week at US$56.45/barrel as compared with previous week of US$61.33/barrel.
A recap of last week economic data/event is as followed.
- 13th Nov 08, International Trade reported -US$56.5b, market consensus -US$57.0b and previous value of -US$59.1b.
- 13th Nov 08, Jobless Claims came in 516K, market expecting 482K, previous value 481K.
- 14th Nov 08, Retail Sales reported -2.8%, market consensus -1.9%, previous value of -1.2%.
- 14th Nov 08, Import Prices came in -4.7%, market expecting -4.2%, previous value of -3.0%. Export Prices came in -1.9% with previous value of -1.0%.
- 14th Nov 08, Consumer Sentiment reported 57.9, market consensus 56.0, previous value 57.6.
- 17th Nov 08, Empire State Mfg, Industrial Production
- 18th Nov 08, PPI
- 19th Nov 08, CPI, Housing Starts, FOMC Minutes
- 20th Nov 08, Jobless Claims
Technically, DJI long term trend is still a down. Short-term wise could be attempting to do a bottoming. In the ADX chart, DI+ and DI- still negatively spaced. DI+ appears to be bottoming and DI- appears to be cutting down in short-term. This might be an indication of a short-term bottoming and during this bottoming process, DJI is trading within a range of 8,000 to 9,000. MACD histogram is almost at the zero line and the MACD signal appeared toppish last week is about to cut down also. RSI is hovering around the 50% level pretty much indicating directionless. Stochastic appears to be try to cut up and if successful, might have a short-term rebound with resistance at the 9,600 level. The immediate support is the 7,800 level and has yet to be broken despite DJI hitting an intra-day low below 8,000 on 13th Nov 08.
Long term wise, Nasdaq is on a downtrend but short-term wise, looks weaker than DJI. In the ADX chart, DI+ and DI- are still negatively spaced but DI+ continues to drop while in the DJI case, DI+ appears to be bottoming. Also Nasdaq appears to be trading with a lower low pattern from Oct 08 till now. This is quite a worrying sign. MACD histogram is around the zero line and the toppish MACD signals touch and look to be cutting down any moment. RSI managed to hover around the 50% level though and Stochastic dropped to almost 20% level but appear to be bottoming and trying to cut up for a rebound in the next few sessions. Resistance for Nasdaq is at the 1,785 level while support looks to be at the 1,400 level
Long term trend for S&P500 is still a down and short-term wise it does not have the sign of DJI of trying to bottoming for a rebound. It short-term trend pretty much looks like that of Nasdaq. In the ADX chart, DI+ and DI- are still negatively spaced and with DI+ continue to fall, this could be a worrying sign. MACD histogram is near the zero line and the toppish MACD signals is cutting down. RSI though closed around the 50% level but it direction looks more towards down than up. Stochastic however might provide some comfort as it closed around the 25% level and appears to try to cut up in the next few sessions. Current support for S&P500 is around the 820 level and with resistance at the 1,000 level.
With US Presidential election and China stimulus package rally faded, investors soon switched their focus on corporate earnings and economic data/events and making the market as usual volatile. Poor economic data, Henry Paulson's switched of strategy using the US$700b bailout fund and US automobile makers in need of bailout to survive caused US markets to continue the downtrend and closed at least 5% down from previous week. On the surface, Henry Paulson has backed out from the original plan of buying into toxic assets of troubled banks looked bad but the newly suggested method of injecting capital into these troubled banks should be a better option in term of long run.
For the coming week, economic data and events will still be the main driver forces for market direction. The G20 meeting over the weekend has concluded with world leaders all vow to cooperate the save the ailing global economy and even though no instant solution has proposed but this is a sign of towards to solution that is good for the global economy as a whole. Investors banging on an instant solution might be disappointed. The automobile trouble in US should be the main focus for US market this coming week. If General Motor is allowed to bankrupt, the unemployment rate due to that could hit as high as 9.7% hence it is a must save case as in AIG case. Problem is that the US Congress is divided about whether the US Government will take out US$25b from the US$700b bailout packge initially proposed to help financial institutes to rescue the 3 automobile companies or come out another separate fund for it
