Zigman :

I. for one appreciate your activity here, and just wanna say Tnks for your labors and postings...




rds1955

Market Insider: The Week Ahead

A slight thaw in the credit freeze could warm up some cautious buying in battered stocks in the week ahead.

But even so, the market will be subject to wild swings and could attempt to retest lows as investors struggle with the idea of a weakening economy.

"Next week's going to be the week of truth," said Art Cashin, UBS director of floor operations. "We're going to watch not so much the economics. This is all about finance. We're going to see if money starts to move."

There is little fresh economic data, but a heavy calendar of earnings news will get the market's attention. Blue chips like American Express , Boeing , McDonald's , and Microsoft report third quarter results, as well as more than a quarter of the S&P 500 companies.

Fed Chairman Ben Bernanke testifies on the economy on Capitol Hill Monday before the House Budget Committee. OPEC also holds an emergency meeting Friday, at which it is expected to discuss production cuts to battle the sharp drop in crude prices.

Stocks rose more than 4 percent in the past week, the best weekly gain since March, 2003. The week was so volatile that it included the best day since 1933 and the worst since 1987. The Dow finished up 401 points, or 4.75 percent to 8852, while the S&P 500 rose 41, or 4.6 percent to 940.55. This follows the prior week's record 18 percent decline.

Investor Warren Buffett gave the market a shot of confidence Friday when he said stocks are so beaten down that he is buying stocks for his personal account, which traditionally has held Treasurys.

Jerry Castellini, president of CastleArk Management said invesotrs have been sidelined by fear and he expects to see some hunting for bargains. He said he was buying the emerging markets etf this past week and battered natural gas stocks. "There's going to be some wake up next week when everyone goes: 'Wow, the financial system is now solvent again. It's October. I'm down for the year. I'm going to buy some of these beaten up names," he said.

"There's been too many distractions in too many areas for this to be a fair pricing of risk in the system. We may very well go back down again, but it has to feel like if you took Libor down to 3 percent, people would come out of the woods," he said.

Credit Un-Crunching?

It was the credit markets where the good news was happening by the end of the week, particularly in the area of short-term financing. Each day this past week, the rates on Libor, the closely watched bank to bank lending rate, continued to creep lower, and there were some signs of life in commercial paper market. Two year swap spreads have come down dramatically.

On Friday, traders reported that a major bank was actively lending in the interbank market. On Tuesday, the U.S. government announced it would guarantee interbank lending and said it was injecting capital into banks, similar to steps taken by other central banks.

"What you're seeing is incremental advancement," said Kevin Ferry of Cronus Futures Management.

"It is improving, if you look at the vital signs..But we haven't even moved the patient out of intensive care and into a normal room," said Ferry. He said if you look at eurodollar futures, which settle to three-month Libor, they show an optimism that Libor rates will continue to recalibrate and move lower.

"If you look at forward three-month settlement in the futures market they were moving in the 3 to 3.5 percent area. Now, they are moving to the 3, 2.5 level," he said. Three-month libor last settled at 4.419 percent.

Ferry expects to continue to see incremental improvements. "You'll probably see the government buying mortgage-backed securities and buying Fannie and Freddie paper," he said. Buyers have been flocking into one and three-month T-bill traders say that foreign central banks are among those buyers.

"Where are the foreigners? The great amount of agency paper they were buying, they are systematically moving away from agencies and moving into Treasurys. It's what I call the new conundrum," Ferry said.

While short term funding markets are showing small signs of life, spreads are still wide in the corporate and at at record levels in the high-yield market.

In Treasurys, the 10-year fell 27/32 for the week, raising its yield to 3.938 per cent. The two-year was yielding 1.624 percent. The dollar rose 1.2 percent against the yen for the week and was just fractionally higher against the euro at $1.3406 per euro.

For stocks to stabilize, traders say they need to see continued improvement in credit markets. "Does the stock market pop the champagne corks or not? Next week will tell us if there is a retest," said Cashin.

Econorama

There is little data on the calendar. On Monday, leading indicators for September are reported. Weekly jobless claims are reported Thursday, and existing home sales for September are reported Friday. Weekly oil inventories will be reported Wednesday morning.

Treasury Secretary Hank Paulson is scheduled to speak at the National Committee on U.S.-China Relations Tuesday.

Oil Drill

Oil rose on Friday to $71.85 per barrel, but it was down 7.5 per cent for the week, a move that certainly has given OPEC some concern. The Organization of Petroleum Exporting Countries called an emergency meeting for Friday to discuss production cuts.

"I'm fully expecting a production cut upwards of a million barrels, if not more," said John Kilduff, senior vice president at M.F. Global. "They're going to react aggressively to this. The key to it though is Saudi Arabia."

"The Saudis don't want to do it, but in the interest in keeping some modicum of cohesion, they're' going to do it," said Kilduff, a CNBC contributor. "...If they cut and Kuwait cuts, pretty much the cut will be affective and implemented."

Kilduff said he expects crude prices to stay in the $75 to $76 per barrel range with an upper band of $80. "At least with this first cut, you won't see the cheating that bedeviled the cartel in the old days," he said.

Earnings Central

On Monday, American Express and Texas Instruments report earnings. Caterpillar, Coach, Dupont, MMM, Pfizer, BlackRock and State Street report before the bell Tuesday. Apple and Yahoo report after the bell that day. (See more coming earnings below.)

On Wednesday, AT&T, Boeing, Conoco, McDonald's, Merck, and Philip Morris report Wednesday morning and Amazon, Amgen, Pulte Homes and Sallie Mae report after the bell that day.

Altria, UPS, Bristol Myers, and Union Pacific report Thursday morning. Microsoft, Burlington Northern, Aflac and Chubb report after the close Thursday. On Friday, Ericsson reports ahead of the open.


© 2008 CNBC.com
http://www.cnbc.com/id/27244469/page/2/

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ZZman
Thanks for your input to this forum. I find your chart interpretations informative. If you decide to start a new collaborate page I would like to be included.
Duke

ZZman,

I've been reading your market & chart analysis along with the interaction with Stockman... great stuff. I really do appreciate your activity and investment in us. Thanks for the postings!

I am going to work on understanding how the Collaborate page works. When you start a page(s) I would like to be included. I would like to study your approach to Day Trading, Swing Trading and learn of your insights to Technical Analysis.

Thanks,
Patrick

The Week Ahead: Hunt for the Bottom:

Posted By:Patti Domm

The final week of what's shaping up to be a "black October" promises to be volatile and even scary.

Yet traders are also holding out hope that October will be the month where stocks finally hit bottom, even if it means another stinging downdraft before it's over.

The health of credit markets and the global economy will influence stocks in the week ahead. For the U.S. market, there are earnings and a heavy calendar of economic news. The highlight is the Federal Reserve's two day meeting, expected to end Wednesday with a half point rate cut.

About a quarter of S&P 500 companies report, including big oil, and the economic data to watch is the first look at third quarter GDP, expected to be weak but not nearly as week as the current fourth quarter. General Motors' merger talks with Chrysler could come to a head in the coming week, determining the future shape of the U.S. auto industry and tens of thousands of jobs.

Investors will also focus on the final full week of campaigning before the presidential election Nov. 4.

Ripping Volatility:

Stocks have now lost more than 30 percent in the past five weeks. The Dow in the last week lost 473 points or 5.3 percent to 8378, the lowest close since April, 2003. The S&P 500 tumbled 6.78 percent to 876, while the Nasdaq shed 9.3 percent to 1552, both at the lowest closing levels since spring, 2003.

"One has to remain as objective as one can in this environment and watch different indicators and see what begins to change," said Merrill Lynch chief investment strategist Richard Bernstein. "Everyone and his brother has tried to pick the bottom, and they've all suffered as a result. They may be right in the next 15 years and that's fine, but I don't think there's going to be medals given out for being the first one in."

Bernstein said the stock market is reacting now to the sagging economy which may need another stimulus package from Washington to help it pick up. "What's happening is the market is telling us that this is not a financial problem. It's an economic problem, and you can't solve an economic crises of this magnitude purely based on monetary policy or monetary actions, and it's unlikely you'll see any kind of fiscal action until next year" said Bernstein.

Stimulus?

The idea of a second, more sweeping stimulus package has been discussed in Washington and on the campaign trail. On Wall Street, stimulus is increasingly mentioned as a necessary measure to preserve jobs and prevent the consumer from being completely derailed.

"While everyone is talking about the TED spread and watching the spreads, our point is that you want to watch weekly jobless claims," he said. In the past week alone, corporations announced the layoff of thousands as workers, a trend economists expect to accelerate in the first part of next year.

"Regardless of who wins (the presidency), I think the thing to watch is if the Democrats win 60 seats or not," he said. "...From day one, they'll worry about the midterm election in 2010, and they'll want the economy to be in an upswing." Bernstein said if Democrat Sen. Barack Obama, who currently leads in the polls, wins and the Democrats sweep the Senate, it's likely a stimulus package would be passed more quickly.

Bernstein said even with the current volatility and uncertainty, there are stocks he likes. Those sectors include consumer staples and health care. "We think those will be the leaders coming out of this. We also like old fashioned dividend paying utilities," he said. He also looks for stocks with high yields and strong cash flow.

"Things are changing. The dividend yield on the S&P is above 3 percent for the first time since 1992. Actually the dividend yield is within spitting distance of the 10 year note (yield), he said.

Econorama:

GDP on Thursday is the big number to watch.

New home sales are reported Monday, and the S&P Case Shiller Home Price Index for August is reported Tuesday. Consumer confidence is reported Tuesday. Durable goods data is released Wednesday. Weekly jobless claims are also reported Thursday. On Friday, personal income and spending, and the employment cost index are released, as is the Chicago PMI and consumer sentiment.

Earnings Central:

About a quarter of the S&P 500 report in the week ahead with major energy companies joining the list.

Major oil companies report in the week ahead. British Petroleum, Occidental, Valero are out on Tuesday. Hess, Tesoro and Murphy Oil report Wednesday. ExxonMobil, Marathon Oil and Royal Dutch Shell report Thursday, and Chevron releases its report Friday. (See below or more earnings on deck next week.)

Earnings Next Week:

Other companies reporting Monday include Verizon, FPL, Arch Coal and Lorillard. Estee Lauder, Interpublic, U.S. Steel, Whirlpool and SAP report Tuesday. Procter and Gamble, Aetna, Comcast, Corning, Kraft, Kellogg and Moody's are out on Wednesday. Colgate-Palmolive, CVS/Caremark, CBS, Barrick Gold, Motorola and Waste Management release earnings Thursday. On Friday, there are reports from Clorox, Cummins, Weyerhaeuser, and NYSE Euronext.

© 2008 CNBC.com
http://www.cnbc.com/id/27366535

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