- Credit Worries Continue

Market Summary
Volatility in the markets remained high as the bears dominated the momentum early in the week. It is becoming extremely difficult to escape the news about the deteriorating environment of mortgage and corporate lending sectors. This became obvious last week as Countrywide Financial Corp. (NYSE:CFC), one of the nations largest mortgage lenders, announced that the company was tapping into its $11.5 billion line of credit to help improve liquidity. The news caused worry among investors about the stability of the economic environment and has sent the majority of the indexes below the long-term support of their respective 200-day moving averages.

Friday's cut in the discount rate may help alleviate some of the pressure in the short term, but only time will tell what kind of damage the credit problem will do to the markets. For now, the drop toward the long-term support levels is suggesting that the bulls have a lot of work ahead of them in order to prevent a long-term shift downward.