As foretold on Monday, U.S. equity indices finished flat for the week. Although there were some sizeable swings triggered by news stories and speculation, for the most part, investors were not willing to take a position in front of next week’s Federal Open Market Committee Meeting.

The scenario for next week is simple in my opinion. Maximum liquidity is bullish.

U.S. stock markets closed lower under thin trading conditions as most major market participants took the day off ahead of tomorrow’s 2Q GDP report. This left the market wide open for day-traders and scalpers who created a little volatility early before eventually settling down after the mid-session.

September Treasury Bonds posted a loss on Friday, most likely tied to profit-taking ahead of the long holiday week-end and the lack of selling pressure on the equities. Friday’s action appears to be just a temporary slow down in the trend. The weakening economy is likely to continue to underpin the Treasuries.

U.S. stock markets finished sharply lower on Friday although a short-covering rally late in the session pared a decent portion of the loss. The indices accelerated to the downside after the Euro broke through last week’s low at 1.2518.