Weekly Market Commentary:

CORRECTION: Last week, we incorrectly announced a change in the delivery schedule of our weekly 'Market Commentary'. The usual Monday deliver will remain unchanged and you will continue to receive your Market Commentary every Monday. We did make one major upgrade that we're sure you will appreciate.

Starting now, the Weekly Market Commentary will be available online one day earlier, every Sunday afternoon or evening (Depending on your time zone) and will remain on the site until the following Sunday. If your traveling or in a rush you can print and take it with you to read later. For those times when you're without access to your email just go to otcdigest.com and click on the 'Market Commentary' link on the left side navigation bar anytime during the week to read it. We hope you enjoy the added convenience.

It was an outstanding week for stocks. The Dow Jones Industrial Average closed higher for the sixth straight session, finishing the week at 12,343. It was the 18th record close for the bellwether index since October 1st. Last week's 1.5% gain put the Dow up 15% on the year. The S&P 500 also added 1.5% last week closing at a six-year high of 1401, up 12% year to date.

On the OTC Market, the NASDAQ composite gained 56 points on the week to close at 2446, up 11% on the year despite a nominal loss on Friday. Small company stocks have done the best so far this year as the Russell 2000 hit a record high Wednesday then settled back a bit. The small company barometer gained 2.5% on the week and added 19 points to close at 788, up 17% this year.

Last week, we noted that Friday's release of October housing starts could dampen investor's enthusiasm and that's just about what happened. All the major indexes were up substantially until it was revealed that the numbers were worse than any of Wall Street's best and brightest had predicted. Needless to say, this did cause what could have been a big up day to end up as just a decent day for bulls.

Lately stocks have enjoyed support in part aided by the ongoing drop in oil prices. Crude oil closed the week down 6.3% to $55.81 a barrel. Consumer prices dropped in October for the second straight month largely as a result of falling gas prices. Inflation numbers came in at the slowest increase in eight months, removing fear that the Fed might continue to raise interest rates. Good news for bulls, at least for now.

While housing related issues continue to slide out of favor, it is interesting to note that retail stocks have continued to perform well. Clearly, bullish sentiment in the stock market is not reflecting too much concern that the consumer may start to pull back. Housing prices have never had a year over year downturn since 1933 but the new housing index futures on the Chicago Mercantile Exchange are currently pricing in a 5-8% drop this year.

Real estate's big move was part of the reason the U.S. savings rate dropped from 3-4% to minus 1.5% over the past few years. In an environment where housing prices are falling, it appears likely a mild recession could be in store by next summer. As we approach year end, we wonder not if, but when will the bulls start jumping off the bandwagon.

Monday at 10 am EST, the Conference Board releases a composite of ten leading economic indicators. On Tuesday, the Redbook retail sales report is released at 8:55 am, and on Wednesday at 8:30 am jobless claim numbers are released. Seasonal factors point to a good week for stocks heading into the Thanksgiving holiday; however the recent rally is beginning to look a little tired.

Stay tuned!