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Market Insider: Friday Look Ahead

Friday couldn't come fast enough for stock investors.

Thursday, like most of the week, was punctuated by wild, gut wrenching swings. Friday doesn't look like it will be much different.

The Dow ended Thursday up 2 percent at 8691, its first gain in three sessions and its fourth gain in the past 17 days. The Dow finished 172 points higher but moved in a more than 500 points range intraday. The S&P 500 was up 11 at 981. For the month so far, the Dow is down 19.9 percent, and the S&P is down 22 percent.

Energy stocks were Thursday's best performers, up 6.6 percent as oil moved higher. Oil finished at $67.84 as OPEC met to decide whether to cut production. Materials stocks were the worst performers, off 1.2 percent. Metals like copper and gold continued to sell off though grain commodities reversed some of the week's losses.

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The stock market moved in a jagged pattern, into positive and negative territory during the afternoon. Traders said hedge funds were once again selling.

"It's cross currents. They're (stocks are) heavily oversold," said Art Cashin, director of floor operations for UBS. "They kept challenging a couple of chart patterns. The oversold condition prevented them from going into the free fall they looked like they were going to go into. The next couple of days could be climactic."

Cashin said if stocks break through the lows of October 10, they could go sharply lower with the Dow possibly plunging to a new bottom in the low 7000s. If the October level is tested, and the market holds, Cashin said it could be ready to rally.

"The last Monday of October is one of best days to find a bottom," said Cashin, a veteran NYSE floor trader. Why? "History tells us that."

"Traders always look to that day with a friendly eye. It may turn out that Halloween is the least scary day of the year," Cashin said.

Progress in the credit markets stalled a bit Thursday, as dollar overnight rates inched higher for the first time in two weeks. Traders have said the improvement would be slow and could have setbacks though they remain encouraged.

Another concern was that new data on commercial paper showed that the market contracted for a sixth week to its smallest size in 3-1/2 years. Outstanding CP fell to $1.449 trillion. The Fed though launches its program to purchase high-quality three-month CP on Monday.

Econorama

On Friday, existing home sales are due at 10 a.m. The consensus is for 4.93 million, or an increase of 0.4 percent. Earnings reports are also expected from Exelon, Fortune Brands, Gannett, LM Ericsson, ITT and Ingersoll-Rand, to name a few.

Symbol
Price
 
Change
%Change
EXC
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WF1B
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IR
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ITT
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OPEC holds its emergency meeting in Vienna and should have news on its plan to cut production early in the day. See what M.F. Global's John Kilduff has to say about the meeting.

Questions? Comments? marketinsider@cnbc.com