Weekly Rewind: A Powerful Upside Reversal

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Includes: DIA, QQQ, SPY
by: ETF Prophet

By Jeff Pietsch

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This week, equities saw a powerful upside reversal consistently putting in both higher-highs and lows. The major U.S. indices all ended in the green for the week, with the NASDAQ 100 (QQQQ) leading with a gain of +5.4%. Non-dollar denominated assets performed less spectacularly, however, with the EAFE International index (NYSEARCA:EFA) nearly flat as the USD found footing on the possibility of overseas easing even as the Federal Reserve held key rates at 2.0% (Bloomberg - Euro Declines; RTTNews - Greenback Levels).

Helping fuel the upward move, crude oil once again fell hard to close the week near $115/BBL, over 20% off its recent highs (AFP - Oil Prices Slump). In fact, Liquid Commodities (NYSEARCA:DBE) fell back another -9.0% on the week. Sector-wise, Consumer Discretionaries (NYSEARCA:XLY) put in the strongest performance of +7.5%, while Small-Cap Value (PWY) stocks led the pack from a style-perspective at +4.2%. Meanwhile, Financials (NYSEARCA:XLF) took a relative breather with a gain of +1.4% on poor Fannie Mae results (AP - Fannie Mae Loses) and regulatory heat from Cuomo's auction-rate security investigations (AP - UBS Settles): impressive given the news.

Looking ahead to Week 33, while strong breadth and oscillator headroom suggests follow through early into the week, both the Technology and Small-Cap Growth indices may quickly become due a relative pullback. Otherwise, trading will be dominated by Price, Inventory and Retail Sales reports on Wednesday; CPI and Initial Claims on Thursday; and various production indices and the Michigan Sentiment report on Friday. The battle between Russia and Georgia may also play on commodities (Bloomberg - Russia Is Waging), while another 214 companies are scheduled to report earnings.

• Yahoo! U.S. Earnings Calendar
• Yahoo! U.S. Economic Calendar

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