The
Weekly Report for January 28th - February 1st, 2008
January 27, 2008- Market Summary
It was a roller-coaster ride for traders last week as volatility
spiked to multi-year highs on the heels of a global market selloff.
The timely decision by the Federal
Reserve to cut interest rates by 75 basis
points helped relieve the immediate selling pressure, but only
time will tell whether this decision will be able to help prevent
the economy from sliding into a recession.
In our last report, we mentioned it would be extremely risky to
bet on a bounce at this point, and we expect that this story will
continue given last week's 2.2% drop in existing
home sales. Thursday's disappointing figures put an end to the
worst year for U.S. home prices in almost four decades.
As you can see
from the charts below, the major indexes are all trading below the
resistance of their respective long-term moving averages. We noted
that market participants were not overly impressed with President
Bush's $140 billion economic stimulus package and it will continue
to be interesting to see if this plan will help give the economy
the jump-start it needs to shrug off the weakness.
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