The Week Ahead: The sudden discount rate cut by the Fed has some believing the fed funds rate will be reduced soon while others see the immediacy as a sign of trouble in the banking system. Thus, market volatility is likely to remain high until this story unfolds. Take note of the July leading economic indicators on Monday, crude oil and gasoline inventories on Wednesday, jobless claims on Thursday, and new home sales and durable goods numbers on Friday.

Stocks to Watch: An important week for retail stocks unfolds this week. Consumer spending has had a stretch of weakness not seen since 2002 so far this year as a majority of retailers missed already lowered sales targets in July. Earnings reports from large companies are due: Lowes (LOW) on Monday; Target (TGT), BJ's Wholesale (BJ) and Staples (SPLS) on Wednesday; Abercrombie & Fitch (ANF), and Foot Locker (FL) on Thursday; Gap (GPS), Limited Brands (LTD), and Barnes & Noble (BKS) on Friday.

Special Note: With the real estate market in decline and now the retail sector weakening, economists are just now increasing the chance of recession to only 65% even amidst the deteriorating credit conditions now sweeping the country. The DOW, S&P 500, and Nasdaq are all bouncing off or around their 200 day moving averages but will run into resistance just north of current prices. With the larger than normal swings in stocks, traders can quickly lock in profits and stay liquid for new opportunities.


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


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