The Week Ahead: The good news that payrolls were up and interest rates cut again was over-shadowed by oil hitting $96 a barrel and financial related stocks like Citigroup, Merrill Lynch, Ambac, and MBIA declining due to the roiled asset-backed securities market in SIV's, CDO's, and ABS's. Look for a continuation of this trend and watch Wednesday's wholesale trade numbers, crude oil and gasoline inventories, and productivity and labor costs. Chain store sales are out on Thursday while the trade deficit numbers and import prices by Friday.

Stocks to Watch: Western Digital (WDC) broke to a 52 week high after solid 1st quarter earnings, a 40% jump in revenues, and a positive outlook next quarter. Flowserve Corp. (FLS) more than doubled its earnings last quarter and moved to an all-time high. On the downside, Cigna Healthcare (CI) fell below the 200 day moving average after improved 3rd quarter numbers but disappointed on its outlook next quarter. Las Vegas Sands (LVS) gapped lower on earnings .19 below estimates for the 3rd quarter.

Special Note: Statistically speaking, the month of October or November may mark the top this year for the S&P 500 and/or Nasdaq markets in particular mainly because the last four years in a row December registered the highs. Four years in a row of December highs had never happened until last year let alone a potential fifth year in 2007. Also, a widely recurrent and consistent 3.3 year cyclical low is due by next March or April. This cycle is particularly violent after the preceding 4 year cycle low is muted such as 2006. Similarly this happened in 1986 with the 3.3 year cycle low crash of 1987.


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

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