WizzWatch Market Newsletter 11.03.08 – 11.07.08

At the close of the week we put the month of October in the books. The Dow Jones Industrial Average and the Nasdaq ended the month with their best close since 1974. The Standard and Poors 500 ended the month with its worst month in 21 years but its best week in 34 years. The Dow, the Nasdaq and the S&P ended the week on the upside, but we are not out if the woods yet. We are still in a bear market waiting on the return of the bulls. This week was the first time in the history of the stock market that all three indices posted 10 percent gains on the same week.

The Dow Jones Industrial Average ended the week on the upside after pulling back the week before. The index has been looking very well this week but it needs to move above 9500. The relative strength indicator is on a move to the upside as well as money flow. Volume has been higher than the average weekly, and the moving average convergence divergence is also turning to the upside, but we have not gotten a confirmation of that move for now. A move above 9500 will be a very strong move being that we have been getting strong resistance in that area for the past few weeks whipsawing between 8100 to 9500. The index is above its 5 week moving average but below its 10, 50 and 200 week moving averages. The Dow ended the week trading at 9,325.01 up 946 points or 11.29 percent for the week on 5.94 billion trading volume.

The Nasdaq Composite Index turned to the upside this week after pulling back for the past 11 weeks. As for now all indicators are currently turning to the upside. The Nasdaq had heavier than average volume come into the price of the index and it’s also above the 5 week moving average currently at 1,716.23. The Nasdaq is below the 10, 50 and 200 week moving average. The Nasdaq ended the week trading at 1,720.95 up 168 points or 10.88 percent to end the week higher on 12.7 billion trading volume.

Over at the S&P 500 the index has been moving to the downside for several weeks but as of this week we finally had a move to the upside. The S&P has been moving in a sideways consolidation for the past few weeks and is now looking ready to make a move to the upside after crossing above its 5 week moving average. The money flow indicator has been turning to the upside along with relative strength and on balanced volume. Heavier than average volume has been coming into the price of the index as well. The average weekly volume on the S&P is 19.3 billion but the index ended the week with volume of 25.8 billion. The S&P ended the week trading at 968.75 up 91.98 points or 10.49 percent.

The Oil Index is starting to make a move to the upside after several weeks of declines. OPEC oil ministers stated that they will cut production in November after a meeting in Vienna 2 weeks ago. The production cuts will be put into effect in the next few days or coming weeks, so therefore we will see higher oil prices going forward. After pulling back from an all time high in July at $147.90, oil fell to a low of $61.30 before ending the week higher. The oil index ended the trading session on Friday at $67.81 per barrel up $3.66 or 5.71 percent. I predicted that we will drop as low as $50 per barrel but for now it seems like that will not happen if oil prices start moving to the upside.

As for the price of gold, the index has been on a downside for the past few weeks. After making a price high of $1,030 per troy ounce, the gold index has been on a decline. The gold index has been moving on the downside, and it looks like it might be headed lower. Downside support on gold is currently at $680.00 per troy ounce and we might see gold head lower in the near term. As for now the index is below it 5, 10, 50, and 200 week moving averages. The 5 week moving average is at $785.68 and we would need to see a move above that level before heading higher. As for now the gold index remains on the downside. Gold ended the week trading at $718.20 per troy ounce down $12.10 or 1.66 percent.

A key market indicator that I have been watching for the last few trading weeks has been the volatility index also known as the (VIX). This index is used to track investor confidence in the market. The index has been on a rise due to heavy selling pressure in the stock market. As of this week it’s been on a pullback to the downside. Aftee the decline from an all time high in price at 89.53 the (VIX) opened the trading week at 79.13 but ended the week much lower. This is a great sign that the market will be turning around and there might be an upturn in the markets after several weeks on declines. The VIX ended the week on the downside at 59.89 or down 19.24 points or 24.31 percent.

Over in the currency markets the U.S. Dollar has been on a huge run since the middle of July. After the weak consumer confidence numbers and the bad (GDP) Gross Domestic Product data, we might see a pullback in the price of the dollar in the near term. With a pullback in the price of the dollar, that might have an impact on the price of oil as well as the price of gold going forward. We could see a price increase in the prices of both the gold and the oil index going forward if the dollar continues to decline. The U.S. Dollar ended the week trading at 127.25/35 against the Euro, 160.70/71 against the British Pound, and 98.47/57 against the Japanese Yen.

By: Marlin Rolle

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