The Week Ahead: Strong GDP numbers and rising consumer sentiment were not enough to prevent a 3.5% decline for the month of January. This is the markets worst month since last February and bears watching closely from here. Investors will sift through 3 reports on Monday: Construction spending, Personal Income, and the ISM Manufacturing Index. On Tuesday auto sales and pending home sales are reported while the main report on Wednesday is the ISM Non-Manufacturing Index. A productivity report and factory orders is due Thursday, but the main event is Friday’s jobs report.
Stocks to Watch: Berkshire Hathaway (BRKB) rose to a new 52 week high after its historic stock split and addition to the S&P 500. Gannett CO. (GCI) the newspaper publisher reported ad revenue declining but is looking for a strong political ad season with big elections later this year and upbeat auto ad revenue as well. Arch Coal (ACI) broke down sharply on a disappointing 2010 guidance. Sandisk (SDNK) likewise broke sharply lower after its earnings report. Look for Exxon Mobile (XOM) to report Monday and Cisco (CSCO) on Wednesday.
Special Note: The three major indexes DJIA, S&P 500, and Nasdaq all broke through and closed below there 5 month moving averages on expanding volume. The volatility has clearly picked up. The 10 month moving average currently rising through 9450 on the DOW usually acts like a magnet for prices after the 5 month average is breached. Despite near term bounces, the area surrounding the mid 9000’s could be the next area of support for a more substantial rally. Incidentally, foreign currencies and commodities including gold have all fallen sharply the last two months as stocks play catch up.
Market commentary provided by Barry Ward, registered principal, NobleTrading.com, Inc.
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