The Weekly Market Wrap up… Market gains and then slides back down.

It has been pretty interesting the past week as the market is still trying to ascertain the condition of the economy and find direction. The Futures and Stock exchanges saw gains during the last following the FED’s commitment to battle the recession, The government stimulus package and Mr. Warren Buffet’s positive views on the economy. As expected the situation is still very volatile and the market declined again today. S&P index is around the 1328-1334 range which is the lowest range this week.

The Financials continue to take a hit with Citigroup (C) on a new low of below $25. interesting plays today included Sprint (S) which despite the tank in the market continued to rise. Size breaking at $8.55 allowed a big position to be taken with an out at around $8.70. Sprint is currently at $8.77. Other plays included citigroup (C), General Motors (GM), Bank of America(BAC) and BMY. Fake sizes and pushers continue to dominate the market throughout the day which allows both quick opportunities and cause for caution when taking position ahead of big sizes.

Coming back to the economy: The question on most people’s mind continues to be ‘where does the economy go from here?’ “Is this time to start looking for a bottom or are we going to continue with the declines?” Apparently as far as the FEDs are concerned the economy is in reasonable shape and will eventually correct itself by the end of 2008. The housing and financial troubles are no doubt causing many problems, however they are expected to correct themselves in the near future. In my opinion, things will take a little longer to fix than the FED is expecting. Problems with the Bond insurance and Housing are far from over. Manufacturing numbers released this week by the Philadelphia FED were also viewed as disappointing. Finally, another interesting point to note is the current stock market rip may be more due to the fact that traders are speculating (*Cough* betting) the Fed will cut another .75 off the interest rate. If this is the case then greater caution must be taken during the current market volatility and all eyes and ears pointed towards economic indicators and the FED.

- Danial Jameel (www.daytraderlog.com)

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