RSS feedIt would seem that we’re off to an inauspicious Post-Halloween period. Unfortunately, credit market turmoil has continued to rear its ugly head and massive writedowns throughout the financial sector and throughout the world are starting to cause some real concerns about the economy in the US. Goldman Sachs decided to add fuel to the fire today with a downgrade of Citigroup. It would seem that analysts believe that there will be more write downs to come.
This week could mark a turning point in the 4 and a half year long bull run in the markets as the S&P 500 is dangerously close to breaching its longterm trendline (as shown below).
It would seem that there is support at around 1430 and, should this be violated, a test of August’s lows in the 1380-1400 range could be in upcoming. This would also violate a four year trend of higher lows leading to higher highs and bears watching as this could be a technical signal for the reversal we’ve all been afraid of. It would also give further evidence to economic pundits who have been screaming about recession for the last year.
On the horizon this week are results from Target, Nordstrom, and Hewlett Packard as well as new housing figures. The start to this holiday shopping season will be important in gauging the impact of recent turmoil in financial markets on the average consumer. Let’s hope there’s just enough good news to bring some buyers out and set us up for a year end rally.
November 19th, 2007 at 9:53 pm
Today’s action was extremely disappointing for the bulls. The selling is absolutely relentless at this point. I think the long term still looks good, but there might not be that normal holiday rally this year.