WEEKLY Market Preview Aug 30, 2009

Posted by admin as shares and stocks

Weekly Market Preview:

Sat Aug 29

With recession recovery hopes on the rise,  Wall Street faces its historical worst month of the year. Coming exactly one year from last September’s financial market debacle, the market has already risen 50 percent from last March’s lows but evidence piles up indicating both traders and investors are turning cautious.

On the mend the economy may well be, but pros on the NYSE floor reckon a period of consolidation draws nigh and is even overdue. Others feel the market will need to consolidate to avoid getting overextended (versus only “extended”, one presumes). Still others point out that further gains will only bring the market back to its levels a year ago before the financial panic deepened on the heels of Lehman ‘s collapse and AIG’s controversial rescue. September effect angst combines with seasonal volume and volatility rebounds to foment a level of consternation even at the market’s apparent disinterest in “consolidating” on its own…

Next month is the market’s worst month historically, with an average loss of around one percent. Last year’s financial market meltdown, Lehman’s failure and the coincident credit freeze dragged the S&P down by 9.2 percent for the month. “The curse of the month of September, the weakest month of the year, is likely to bring in some selling before we even enter the month,” said Al Goldman, veteran strategist at Wells Fargo Advisors. “ Also, there is no clear evidence that the market has totally worked off its five-month, 50 percent rally. Fortunately, these are only very short-term problems. Much more important are the improving fundamentals and a reasonable (valuation) ratio.”

That said, a recent study undertaken by BarclayHedge, Interconti, Ltd. & Attain Capital indicates that along with rising volatility comes enhanced opportunity at least for traders approaching the markets via financial futures contracts traded using hi-frequency computerized systems or managed by trend-following CTAs.

Eco-data releases expected this week include:

TUESDAY, Sept. 1

NEW YORK — The Institute for Supply Management releases its manufacturing index for August.

DETROIT — Major automakers report U.S. auto sales for August.

WASHINGTON — Federal Reserve releases minutes of Federal Open Market Committee meeting of Aug. 11-12, National Association of Realtors releases pending home sales index for July, Commerce Department releases construction spending for July.

WEDNESDAY, Sept. 2

WASHINGTON — Labor Department releases second-quarter productivity; Commerce Department releases factory orders for July, Securities and Exchange Commission and the Commodity Futures Trading Commission hold joint meetings on current financial rules and recommend changes, (Through Sept. 3).

THURSDAY, Sept. 3

NEW YORK — Retailers report sales results; the Institute for Supply Management releases its services sector index for August.

WASHINGTON — Labor Department releases weekly jobless claims, Freddie Mac releases weekly mortgage rates.

FRIDAY, Sept. 4

WASHINGTON — Labor Department releases employment data for August.