The U.S. stock market was closed down in pre market trading as fears of a signicant sell off pushed the market down over 550 pts in pre market trading. There was speculation that the market could drop over 1000 pts in one day as panic seems to be spreading into all areas of the economy. The recent sell off can be further attributed to hedge funds that have to liquidate holdings as they are over leveraged and are essentially forced into selling the market.

There was some good news in the market that was overshadowed on Friday. U.S. home sales climbed higher for the first time in the past thirteen months. Mortgage rates have moved lower over the past two weeks and are begining to move closer to the six percent range. There is also a growing sentiment that the government will roll out a more strategic plan aimed at slowing down the foreclosure crisis. If the housing market finds a bottom, the economy will likely be able to turn around much quicker and the recession could be over in the next 12 months.