The markets ended the last week of February 2010 almost flat. The SPDR S&P 500 ETF (NYSE:SPY) ended the week -$0.40. While they were basically flat, that does not describe the crazy movement and wild swings the markets displayed during the week. Between the wild swings in the U.S Dollar and the horrid economic news, the market barely held on. Looking back on the week, it almost seemed too perfect. All the bad economic news, the dollars simple trickling lower helped keep the markets from a near crash scenario. If you can control the dollar, in the near term you control the markets and can keep them up. At this point we all know the Federal Reserve controls the dollar.
The economic news started badly and just got worse. On Tuesday, Consumer Confidence came in far less than expected and on Wednesday New Home Sales shocked to the downside. On Thursday Durable Goods and Jobless Claims were disappointing and on Friday, Existing Home Sales were nothing to write home about. With all this news shattering the hopes of a soon to be recovered economy, one would have guessed the market would have been crushed. Not so! The dollar fell lower for the week keeping the markets with their steroid inflated buzz. How long can it last? Watch this week closely. At some point here very shortly, Wall Street and Main Street will collide just like they did in early to mid January when the markets fell almost 10%. Just like my top call to my members in early January, there is another one coming up here shortly.
The first stock to watch this week is Palm, Inc. (NASDAQ:PALM). Sales for Palm do not look good at all and the stock has dropped over 50% since the highs in January. While the company has had some ugly news of late, it is possible to see a technical bounce shortly. If there is one thing I have learned as a trader it is…nothing goes straight up or straight down. There are always short term swings available should the technicals be read correctly.
The second stock to watch this week is Costco Wholesale Corporation (NASDAQ:COST). They report earnings on Thursday March 4th, 2010. Analysts expect them to report $0.71 in earnings per share but whisper numbers put expectations slightly higher at $0.73 per share. The stock has made an impressive climb from its January lows around $57 to a closing price on Friday at $60.97. One has to wonder how much of their earnings are already baked in.
Below is a video summarizing the key levels and outlook for the week. Enjoy!
http://inthemoneystocks.com/n_rant_and_rave_blog_single.php?id=5913
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
