A Turbulent Week on Wall Street
Feb 27, 2011
Posted by Jody Eisenman | Filed under Uncategorized
After a long three day weekend thanks to President’s Day, the markets showed their first real weakness in months, mostly in reaction to the turmoil in the Middle East. While Gaddafi appears to be on the run in Libya, oil prices spiked to a peak of over $103/barrel on Thursday before settling back under $98. Although the stock market rebounded nicely on Friday, the DJIA lost about 260 points for the week. This was the worst week for stocks since August 2010. There have been numerous reports on massacres in Libya, as well as possible sabotage to oil pipelines. Of course, the real fear is that this spreads to Saudi Arabia. Although I don’t expect this to happen, if it does, I would expect all hell to break loose.
On the positive side, the Thompson Reuters index of consumer sentiment rose to 77.5%, the highest level in three years. What’s next? It would seem to me that “the trend is your friend”, and barring an unforeseen event, I think the combination of strong earnings and QE2 pumping should continue to send the market higher in the near term. On a technical basis, 1338 would appear to be a key technical level on the S & P, which closed at just under 1320 on Friday. A strong close above this number could send stocks dramatically higher. However, with the Middle East in a period of political uncertainty, anything could happen.
