This week saw volatile trading sessions, again, with the Dow down 237 points on Monday, up 217 points on Tuesday, up 332 points on Wednesday, up 20 points on Thursday and up 60 on Friday. Concerns over credit woes continued as well as rumors of Citigroup layoffs.

Items of note:

• New Home Sales for October rose by 1.7%, but that figure is misleading as September sales, originally reported at a 770k annual pace were decreased to 716k, October sales came in at 728k, which although lower than expected looked better than it was due to the September revisions.
• The Case-Shiller Home Price Index showed a year to year decline of 4.5%.
• Existing Home Sales fell to an annualized pace of 4.97M in October, lowest level since 1999, with inventory levels at a 8.5 month supply, year to year sales were down 24%. “This looks like it’s going to be the deepest correction of any housing correction since World War II, and the question really is, ‘What’s the duration, how long will it be?’” Centex CEO Timothy Eller…..it will be interesting to see if he is right.
• Fed Chairman Bernanke spoke and gave hints of another rate cut in December.
• Personal Spending and Income report showed that consumer spending was flat.
• Weekly Jobless Claims came in higher than expected at 352k this has been a trend for a few weeks and I’m sure the writer’s strike is making it’s contribution.
• Treasury Secretary Paulson is trying to get major banks and mortgage servicers to freeze rates on adjustable rate mortgages.
• Crude oil declined below $90 per barrel.

With weak dollar and inflation concerns continuing the Dow ended the week up 392 points or 3% based on the idea that having reached the 10% decline or correction level will set the stage for a year end rally and of course that the Fed will keep cutting rates.

Have a great weekend!