The Week Ahead: Friday's late day sell-off was triggered by an S&P downgrade of Bear Stearns' debt to negative. This capped off a wild week of trading with the Volatility Index (VIX) hitting a 4 year high. With the credit markets in turmoil, the FOMC meeting this Tuesday carries greater significance than usual. Look for a change in policy statement towards an easing of interest rates soon. Other reports to watch are the productivity and unit labor costs on Tuesday, and mortgage applications on Wednesday.

Stocks to Watch: Cisco Systems (CSCO) will report earnings on Tuesday. The stock has been one of the better performers, but could be forming a top here in the low thirties. BMC Software (BMC) reports on Monday and has been breaking down of late. News Corp. (NWS), Sprint Nextel (S ), and American International Group (AIG) report on Wednesday. All have recently circum to market weakness. Echostar (DISH) has numbers out on Thursday but has broken through its 200 day moving average.

Special Note: The Russell 2000 Index (RUT) is one of the first major indexes to go into the red year to date while other indexes like the DOW Industrials are weakening. The 200 day moving average on the DOW could act like a magnet of support at around 12,750. Near-term though a rally of significance could be in the making as most technical measures are oversold. Traders may want to take advantage of further weakness of prices, but longer term investors should use due diligence in there stock selection.


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


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