Another Wild Week:
The past 10 trading sessions have been frenetic, highlighted by the Thursday, May 6th. meltdown. The next day, immediately after last Friday’s close I wrote:
“Although the volatility is shocking, I believe this week just may have shaken many sellers out of the market and I fully expect any additional selling on Monday will meet solid support at the 10,250 level. Look to the early days of the week attracting bargain hunters and I predict we will see the DOW in the neighbourhood of 10,600 by week’s end.
I am not about to boast and declare: “I told you so”!
Although I was correct in my end-of-the week predicted close for the DOW [10,620], I had no idea that before closing the week at that level that the DOW would have skyrocketed to a high of 10,920 [yesterday]. Expecting a rise of about 250 points for the week I felt was a reasonable bounce following the previous week’s huge selloff. But during these highly volatile markets it is important to remember that when they sell off they sell off with a vengeance and when they buy them they run them up, way too far, way too fast.
Friday, May 14, 2010: Recap:
Economic concerns from Europe returned once more to haunt the Street. Spending cuts highlighted in the euro zone rescue package fuelled fears of economic stagnation throughout the continent, and escalated doubts about the weaker countries’ ability to bounce back from their huge debt.
The U.S. Senate passed measures allowing the Federal Reserve to regulate debit-card transaction fees which escalated the bearish mood and pressuring financial stocks lower. Also, disappointing earnings reports from J.C. Penney (JCP) and Nordstrom Inc. (JWN) offset the unexpected jump in retail sales in April.
Overall, the Dow Jones Industrial Average (DJIA) recorded a triple-digit loss for the fifth time this month.
The Dow Jones Industrial Average (DJIA – 10,620.16) finished down 162.8 points, or 1.5%. Despite today’s selloff, the Dow remained above its 20-week moving average, finishing the week 2.3% ahead and recording its first weekly gain since mid-April.
The S&P 500 Index (SPX – 1,135.68) gave up 21.8 points, or 1.9%, and added 2.2% for the week. Meanwhile, the Nasdaq Composite (COMP – 2,346.85) lost 47.5 points, or 2%, but ended the week with a gain of 3.6%. The COMP also found a foothold at its 20-week moving average.
