The Week Ahead: Volume trading in the markets will increase starting this week as many big dollar traders return from vacations. The focus starting this week will be on the Federal Reserve September 20 meeting and decision on interest rates. The 2nd quarter productivity and unit labor cost reports are released Wednesday and wholesale trade numbers are out on Thursday. The price of oil has softened in recent days so watch Thursday's crude oil and gasoline inventory figures.

Stocks to Watch: Shares of Lockheed Martin (LMT) are breaking higher after NASA awarded a multi-billion dollar contract to build the Orion space craft for a lunar landing by 2020. Devon Energy (DVN) was upgraded after a discovery of oil in the Gulf Coast. The stock appears to be pushing out of a price consolidation as the 50 day moving average crosses upward through the 200. Verifone (PAY) gapped away from an important bottom as it surprised the street with a 17% jump in revenue and increased its 2007 earnings guidance.

Special Note: The 15 day average of the OEX put/call ratio has pushed above 1.55. This is significant because only 4 times in the last 16 years has this occurred each marking a stock market top formation. Another indicator, the discount rate is currently at 6% which has proven to mark a high point in the market each time it has reached this level. Combined, these two indicators should give investors a double dose of caution going forward. Diversification and hedging long positions with puts or shorts should serve investors well in the coming weeks and months.


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

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