Weekly Market Commentary:

Last week's most significant number "du jour" appears to have been Friday's update from the Commerce Department showing weak manufacturing output. That number fell below 50 for the first time since April of 2003, to 49.5, after finishing October at a dismal 51.2. Thus we have the first hint of an economic slowdown which was enough to tip the scales in favor of the bears last week.

The Dow Jones Industrial Average lost less than 1% on the week to close at 12194.13, the S&P 500 gave up less than .03% to close at 1396.71. The Nasdaq Composite lost 2% to close at 2413.71, while the small cap Russell 2000 gave up 1.4% to finish the week at 781.17.

Good news in the form of revised real GDP numbers were released by the Commerce Department Friday, showing third quarter growth coming in at 2.2% rather than the 1.6% previously reported. Existing home sales rose .5% in October which buoyed housing stocks, even though the median selling price dropped a record 3.5%. This was the third monthly drop in a row, and the steepest month over month decline yet.

The week ahead points to Monday's Pending Home Sales Index. On Tuesday, reports include productivity and costs along with Factory Orders and the ISM Non-Manufacturing Survey. Jobless claims are announced Thursday, and Friday could again determine the fate of the weeks' action, as employment and consumer sentiment numbers are reported.

With real estate slumping and the dollar getting drubbed around the globe, liquidity remains at very high levels and merger and acquisition business is brisk worldwide. Insider selling has recently hit levels usually associated with markets ready to correct, but with most major media outlets expecting a drop, our radar is beginning to point towards the immediate possibility of a Santa Claus rally.

Stay tuned!