The Week Ahead: The roller coaster ride in the markets continues as the volatility index moved over ten points in the last 3 days. The Federal Reserve moved 3 times to provide liquidity to calm bond and equity markets to avoid a crisis of confidence due to a burgeoning credit crunch. Besides the retail sales numbers on Monday, watch the Producer Price Index (PPI) and trade deficit numbers on Tuesday and the Consumer Price Index (CPI) on Wednesday for clues to the inflation outlook. The housing starts figures will be released Thursday.

Stocks to Watch: Fannie Mae's (FNM) request to lift its mortgage holding limit was rejected by the federal government as the stock dropped in after market trading on Friday. Alcoa (AA) continues to weaken as nervousness from the sub-prime mortgage fallout has dampened a takeover possibility. Earnings from Applied Materials (AMAT), Home Depot (HD), and Wal-Mart (WMT) are due out on Tuesday. Macy's numbers are due by Wednesday while Hewlett Packard (HPQ), JC Penney (JCP), and Nordstrom (JWN) are out on Friday.

Special Note: One technical measure of the three major indexes using the Japanese Candlestick methodology shows a rare occurrence. Two successive black candles with higher highs on a monthly chart for the months of June and July. A black candle is formed when a day, week, or month closes beneath its open. For two consecutive months the Nasdaq, DOW, and S&P 500 failed to hold its open yet made higher highs in there respective trends, a rare development and one to watch as a potential big sell signal.


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


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