WizzWatch Market Newsletter 10.13.08 – 10.17.08

As for the week that past, it was a roller coaster ride in the stock market for many investors. The stock market made history after having its worst week in its 112 year history. The Dow Jones Industrial Average and the S&P 500 pulled back for the ninth week in a row. Over at the Nasdaq it pulled back for the eighth week in a row as the stock market ended the trading the week in one of the wildest weeks in history. The S&P 500 had its longest losing streak since 1996 and its worst week since July 21, 1933. Fear was one major factor as the Volatility Index ran up to its highest point ever as investor confidence sky rocketed due to the heavy selling. This week also took a huge turn for the hedge fund industry as banks demanded money from loans to support margin calls. It was the biggest margin call since 1929 as many hedge funds have been forced to liquidate or sell holdings in order to pay off loans. There was also a ban on short selling that took affect two weeks ago but was lifted and it also took a toll on the markets as short sellers applied pressure to the market sending it in free falling even more.

The Dow Jones Industrial Average ended the week trading below its five and ten week moving averages. During the second week of October 1 year ago the index hit an all time high at 14,198.10 and ever since then we have seen the Dow decline to where we are today. We are currently down 5,747 points from its all time high and we have a long way to go from here in order to get back to the 14,000 area. Many investors think that we will get there but it will not be quick. It took the Dow a little over 5 years to get from the 7500 area to its all time high. The five week moving average is currently at 10,546.03, and the ten week is currently at 11,051.69. The index started the week trading at 10,322.52 but ended the week down over 1800 points. The Dow Jones Industrial Average ended the week trading at 8,451.19 down 1,874.19 or 18.15 percent on 8.6 billion volume. Downside support is at 7,416.64 a retest of the lows that were made on the Dow in October of 2003. As for now the index looks poised to move higher but a confirmation of the move has not happened so we may still see more downside in the near term. A confirmation of a move to the upside would take place once the index is on or above its 10 day moving average.

Over at the Nasdaq it was the same old different week as the index took a dive after opening at 1,894.39 falling to a low at 1,542.45. We are now in the eight week of this pullback and there might be more to come from here. We are still in a bear market for now but the end is not far away as many stocks are in oversold territory. At the end of the trading session on Friday the Nasdaq ended trading on the upside while the Dow and S&P 500 continued to tumble. The higher close was due to a big moves by stocks such as Deckers Outdoor Corporation, Consolidated Water and Apple Computer to name a few. The Nasdaq ended the week trading at 1,649.51 down 432.82 or 20.79 percent on 23.5 billion volume.

The S&P 500 had a rough week as the index pulled back for the eighth consecutive trading session and the ninth week in a row. There were only a few stocks on the upside as the index tumbled. The S&P traded at lows that were made back in March of 2003 and currently has downside support at 775.68. The index is currently below its five and ten week moving averages. The all time high on the S&P is at 1576.09 and we have a long way to go from here to get back to the all time high in price. The index ended the week down 899.22 down 265.52 or 22.80 percent.

The Gold Continuous Contract Index has been on the move during this past week after pulling back the week before. As for the Philadelphia Gold & Silver Index and the Gold Bugs Index both have been pulling back for the past two weeks. The Gold Continuous Contract Index started out the week opening at $836 per troy ounce and headed higher for the entire week. The reason for the rise in price was due to the heavy selling of shares in the market as well as fear and uncertainty. Gold hit a high in price at $932.11 but ended trading lower at the close of trading on Friday. The all time high in the price of Gold was set in March of 2008 but has been on a pullback and has recently started moving to the upside. The Gold Index ended the week trading at $848.48 per troy ounce up $15.28 or 1.83 percent.

In the oil sector the Oil Index has been under pressure after making an all time high at $147.90. After the high in price, oil has been on a pullback and its down $70.20 per barrel from its all time high. The index has been on a downturn for the past 14 weeks with downside support is at $74 per barrel. The AMEX Oil Index, the Oil Service Index, and the Natural Gas ended the week lower. The Oil Index ended the week trading at $77.99 per barrel down $15.89 or 16.93 percent. Many analyst are now predicting that oil will go below $50 per barrel by the end of the year.

By: Marlin Rolle

*** Please have a look at the major market charts below. ***