Dow Closes Higher

The US market started off with a bearish momentum amid rising fears of recession and ended up in a strong bullish note especially in the last hour.

Sweet crude oil fell US$4.69 to close at US$69.85 a barrel on NYMEX, the lowest price since 23 August last year. Investors are hoping lower energy prices will leave more money for consumers to spend.

Although investors are still bearish about the outlook of the financial markets, traders who look for short term opportunities started to enter the markets when the selling pressure ends in the morning. These spurred the market up and the Dow Jones Industrial Average (DJI) shoots up to close 401.35 points higher than the previous day's close. The DJI ended at 8979.26 points, 4.7% higher.

The DJI went as low as 8,197.67 points and as high as 9013.27. There's a 816 points range or 10%. expect the market to continue its volatility as investors and traders speculating whether the equity market will be supported by the government help.


5-minute DJI chart for 16 October 2007, using NextVIEW Advisor

Meanwhile, investors are still seeking safety in their investments as treasury bills are still in demand. On Thursday, the three-month old Treasury bill yielded about 0.50%. It yielded 0.20% on wednesday.

Markets may remain volatile, but the fact is that the bears are still in control in the long run and until a strong consolidation phase takes place, the market is expected to be pulled down by the bears.

N.I.N.E.