Company earnings were impacted by slow down in Europe and stronger US dollar. Investors sentiment swing to negative starting Tuesday and stay negative through out the week. S&P 500 index closed at 1995, down 2.77%. Dow Jones Industrial Average lost 2.87%, while Nasdaq composite index decreased 2.58%.
The sharp sell-off has given back all the gain we had last week. S&P 500 index closed the week below its 28 week moving average and only a few point above its short term support of 1988 level. Since the beginning of the year, S&P 500 index has been traded between 2064 and 1988. We will find out next week if the market is strong enough to bounce from this level again.
The market volatility has forced investors to act cautiously. Defensive sector funds such as health care, real estate, and utility have stayed strong for the past few weeks while finance and energy sectors have been weak. Interestingly, the light crude oil price looks to be building a support at $44 in the past 3 weeks. Of course oil price will not turn around right away after the collapse in the last six months but it has to start somewhere and this may be the turning point.
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| Weekly chart of S&P 500 Index |
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| Weekly chart of Light Crude Oil Price |
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