Stocks end Up 6.8% For Week

This Week's Market Action

by Lou Scatigna

U.S stocks declined on Friday but still finished the week up 6.8%. During the past three weeks the Dow has soared over 20%. It marks the best three week run since September 1982. Since the prior run came just after the inflection point in the 1981-1982 bear market some market analyists are hopeful we have seen the lows for this bear market, I'm not so sure. This month's broad based rally has brought hope to dazed and bloodied investors, but hope when appiled to financial markets usually ends in dashed hope.

Although recent economic reports have been better (less worse) than expected, I suspect there is another down leg to come. Earnings for the first quarter will be announced late April and don't expect them to be pretty. The market is expecting anemic earnings and will be listening more closely to management's guidance for the second half of the year. Recent enthusiasm for bank stocks may be short lived when first quarter earnings are announced. Expect more multi-billion dollar writeoffs at major banks.

March 2009 has been an impressive month for sure. With only three trading sessions left in the month, March is turning one of the top three in the stock market history. Just keep in mind that the biggest bull markets occur in bear markets.

I put some money to work this week in the energy and natural resource sector. Oil has put in a strong performance in March, rallying to over $50/bbl. Gasoline prices are on the rise and could be closer to $3.00 a gallon by mid summer.

Gold was relatively calm this week closing Friday at $923.50/oz down 3.5% for the week.