Market Summary

After four down weeks this last week ended positive. Technology was the big winner as far as sectors are concerned and the technology heavy Nasdaq was up 7.8% for the week. When the Nasdaq and the Russell small cap index lead the market to the upside that is a good sign. Both indexes are now trading above their 50 day moving averages.

Friday was a big up day in spite of the fact that the unemployment numbers came out with almost 600,000 people losing their jobs in January. When the markets go up in the face of bad news that is also a good sign. But why did the markets rally? Because of the hope of a financial bailout by the government. We are in a deflationary environment and the government is desperately trying to avoid a deflationary collapse and stimulate inflation. However, with huge job loses each month that will be difficult as consumer spending is likely to be depressed. Short term rally’s are selling opportunities. Click on table to enlarge.
The performance of the sectors is shown below for the past week. As can be seen it was a good week overall. Click to enlarge.