WizzWatch Market Newsletter 10.20.08 – 10.24.08

For the week that past on Wall Street it was another wild up and down roller coaster ride. The Dow Jones Industrial Average, the Nasdaq and the S&P 500 all edge higher to end the week in positive territory. Economic news was worse than expected, there was huge volatility due to uncertainty over 2009 earnings. Housing starts also fell taking most homebuilding and industrial stocks lower. Oil dropped to a low of $68.92 per barrel but ended the week slightly higher. Gold also declined during the week and the Dollar continues to move higher against other currencies. Retail sales figures hit three year lows, and the Volatility Index hit an all time high for the third week in a row as investors continue to be fearful of the current market conditions. We are in a deep recession that may last for the next 180 days or more before the markets are back to normal.

The Dow Jones Industrial Average ended the week trading below its 5, 10, 32, 50 and 200 week moving averages. The index needs to break above it’s 5, and 10 week moving average for a trend to begin taking it into higher grounds. The 5 week moving average is at 10,032.07 while the 10 week sits at 10,763.48. The Dow ended the week trading on the upside for the first time in 4 weeks to end the week trading at 8,852.22 up 401.03 or 4.75 percent on heavier than average volume of 7.3 billion. Over at the Nasdaq it also ended the week trading higher but like the Dow its below all major moving averages. The Nasdaq edge higher due to earnings from the likes of (GOOG) Google, and (INTC) Intel Corporation. The Nasdaq ended the week trading at 1,711.29 up 61.78 or 3.75 percent on higher than average volume of 14.1 billion. As for the S&P 500 it finished the week on the upside for the first time in 4 weeks. The S&P hit an all time high in October of 2007 at 1,576.09 but as of now it trades exactly where it did in May of 2003. The S&P 500 ended the week trading at 940.55 up 41.33 or 4.60 percent on heavier than average volume of 29.8 billion.

On the oil front there was continued pressure taking prices lower due to declining demand, fuel inventory numbers as well as concerns of the $700 billion bailout plan. Oil hit an all time high at $147.90 in June of this year but is currently down over 50 percent from those levels. Gasoline demand has also taken a hit, currently down over nine percent. There will be an emergency meeting by members of OPEC this coming Friday. The meeting will be a determining factor of whether or not to cut production due to the falling demand. I predict that the price of oil will go as low as $55 per barrel before turning around. Oil started the week trading at $78.04 before moving to a low of $68.92, but ended the week slightly higher trading at $71.13 per barrel.

In the gold market there was also a pullback in prices as the Gold Index, The Gold and Silver Index and the AMEX Gold bugs Index moved lower. Many gold stocks were in retreat mode after moving slightly higher the week before. The Gold Index ended the week trading at $787.70 per troy ounce down 8.30 percent for the week.

By: Marlin Rolle

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