The Week Ahead: The Dow Industrials had its worst start to a new year in over a century. Combine this with oil topping $100 per barrel and employment numbers barely positive, sets an ominous backdrop for the year ahead. A speech by Treasury Secretary Henry Paulson may address these issues on Monday. Pending home sales and consumer credit numbers on Tuesday as well as retail sales figures on Wednesday may give clues to the state of the housing and retail sectors. The week will end with the trade balance report and the Import Price Index.

Stocks to Watch: The following companies: Citigroup (C ), Dupont (DD), Home Depot (HD), General Electric (GE), General Motors (GM), JP Morgan (JPM), Altria Group (MO), Pfizer (PFE), AT&T (T ), and Verizon (VZ) all have something in common. They comprise a list of stocks known as the "Dogs of the Dow" and are the ten highest yielding stocks of the Dow Industrials at the start of the year and generally under performers. This group tends to outperform the market over the next 12 months and have averaged about 17% a year since the early 1970's.

Special Note: Comparably weak starts in the past century have produced double digit declines in the major indexes for the year. This would conflict with the presidential election year positive bias, but recession seems increasingly likely this time around. The housing sector is leading the decline in the economy so watch the numbers coming from this industry first for insight including numbers related to the credit crunch that has ensued since then. Meanwhile as the DOW's decline takes its 50 day moving average thru the 200 day moving average look for a break of the August lows and confirmation of the bear market.

Commentary provided by Barry Ward, Registered Principal, NobleTrading.com, Inc.

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