The Weekly Report for October 13th - October 17th, 2008

Underlying economic issues that plague the global economy ravaged the stock market again last week. The major U.S indexes dropped an astonishing 22% over the past eight sessions and there doesn't seem to be an end in sight to the panic. The charts of all the major indexes continue to bleed red candlesticks, shown by the nearly vertical drops. The volatility index, which is often used to gauge the amount of fear in the markets, has soared to record highs, which could be used as a contrarian indicator to suggest that things could start to settle down over the next few weeks. The panic has truly started to spread across the globe and according to Bloomberg, the Dow and S&P 500 posted their worst weeks on record and that $25 trillion dollars in market value was erased in the global equity markets so far this year.

Taking a look at the charts below, you can see how truly dire the situation is for so many investors. The indexes have sliced through support levels and the extreme volatility that has been present in recent sessions has made it impossible to determine when the selling will end. We continue to believe that the best decision is to remain on the sidelines until everything settles down.