Nasdaq closed 1,564.32 for the week ended 19th Dec 08, up 23.60 points or 1.53% from previous week.
S&P500 closed 887.88 for the week ended 19th Dec 08, up 8.15 points or 0.93% from previous week.
Crude oil price finished the week at US$42.91/barrel as compared with previous week of US$46.58/barrel.
For the whole of last week, US markets traded in a narrow range despite good or bad news. US Federal Reserve cut the Fed fund rate from 1.0% to between 0% and 0.25% and also vowed to use all possible tools next to save the US economy. By doing so, it leaves the US Federal Reserve no more room to play with the interest rate next year to save the economy. US markets cheered the aggressive cut. However, markets also remained cautious as the bailout of the 3 automakers still hanging in the air. OPEC also cut the output by 2.2 millions to prevent the slide of crude oil price but instead of rebound in the price, crude oil price at one time dropped below US$40/barrel. Investors would wonder is the reduction in output already behind the curves ?
A recap of last week US economic data/event is as followed.
- 15th Dec 08, Empire State Mfg Survey reported -25.8, market expecting -27.5, previous value -25.4.
- 15th Dec 08, Industrial Production came in -0.6%, market consensus -0.8%, previous value 1.3%.
- 16th Dec 08, CPI reported -1.7%, market expecting -1.3%, previous value -1.0%.
- 16th Dec 08, Housing Starts came in 0.625M, consensus 0.740M, previous value 0.791M.
- 16th Dec 08, FOMC Meeting Announcement cut interest rate from 1.0% to between 0% - 0.25% with market expecting a cut of 0.50% only.
- 18th Dec 08, Jobless Claims reported 554K, consensus 560K, previous value 573K.
- 23rd Dec 08, GDP, Consumer Sentiment, Existing Home Sales, New Home Sales
- 24th Dec 08, Durable Goods Orders, Personal Income/Outlays, Jobless Claims
Technically, long term trend for DJI remained unchanged and short-term wise should be range bound with a bias towards the downside. DI pair still negatively spaced but with ADX signal near the 20 level, the downside would lack strength. RSI moved up from 50% but Stochastic signals cut down, indicating DJI lack the strength to move up or down and look very likely to be within the range of 8,100 to 9,000 for the coming week.
Technically, Nasdaq long term trend remained unchanged. Short-term wise, Nasdaq should be range bound with bias towards the downside. The DI pair still negatively spaced but with ADX signal near the 20 level, the downside should be well supported and lack the strength. RSI and Stochastic both showing conflicting signal. RSI is moving up towards 70% but Stochastis showing sign of cutting down. Therefore, Nasdaq should be moving within the range 1,400 to 1,600 for the coming week.
Technically, S&P500 long term trend remained unchanged and short-term wise should be neutral with a bias towards the downside. The DI pair still negatively spaced and with ADX signal near the 20 level, any downside should be well contained. RSI and Stochastic both showing conflict signal. RSI moving up towards 70% while Stochastic has cut down. S&P500 should be trading within the range of 800 to 920 for the coming week.
For the coming week, there are several important key economic data to be released like GDP, Personal Income, Durable Goods Orders, New Home Sales, Existing Home Sales, etc. Any of those data worse than expectation might see market pull back but should be well supported since it is a short trading week and most fund managers already on holiday for the Christmas. Over the weekend, US President George Bush handed the 3 automakers a lifeline by giving them US$17.4b emergency rescue loans, taken from the US$700b financial rescue package. In the beginning of the week, market might see some upside due this good news.
