WizzWatch Market Newsletter 11.17.08 – 11.21.08

This week was like every other week for the past few trading weeks. We are still in a BEAR market and no one knows how much longer it’s going to last. The Dow Jones Industrial Average, the Nasdaq and the S&P 500 all ended the week on the downside. Financials led the way with the huge declines, there were 28 stocks in the Dow 30 on the downside as McDonalds and AT&T advanced. Intel Corp. dragged the tech weighed Nasdaq down as the company stated that growth going forward will be very slow. Retail sales declined the most since 1992. Circuit City filed for chapter 11 bankruptcy. The dollar rose against the other major currencies. Companies such as Citibank, DHL, Sun Microsystems and the U.S. Postal Services all announced job cuts. Oil also ended the week on the downside as traders at the NYMEX project that oil may pullback to $30 per barrel by February 2009.

At the Dow Jones Industrial Average there has been whipsawing movement in the index for the past 5 weeks between 8,100 on the downside to 9,500 on the upside. The index started out the trading week at 8,946.60 but dropped to a low of 7,965.42 testing the lows that were made in late September at 7,773.71. The Dow is currently below all the major weekly moving averages. A price move above 9,700 would take the Dow a lot higher but as for now the index remains on the downside. The index ended the week at 8,497.31 down 446.50 or 4.99 percent on heavier than average downside volume of 6.25 billion.

The Nasdaq Composite Index started out the week trading at 1,681.65 but fell to a low of 1,428.54 but ended the week much higher. The Nasdaq ended the week trading at 1,516.85 down -130.55 points or 7.92 percent on 11.03 billion volume. The index is currently below it 5, 10, 50, and 200 week moving averages. Volume was also ended below its average weekly.

As for the Standard and Poors 500 Index there were declines for the second week in a row but we have been trading around this level for the past 5 weeks. The S&P 500 is trading below the major weekly moving averages and needs to move above its 5 week moving average in order to move higher. The index has been wip sawing back and forth the between 830 and 1100 for the past few weeks and its 5 week moving average is at 918.07. The S&P ended the week trading at 873.29 down 57.70 points or -6.20 percent on the downside on 23.39 billion trading volume.

The Gold Index has been on a decline since it made an all time high back in March of this year at $1003.00 per troy ounce. Since the decline of the index, gold is currently down $260.50 from that price high. The index started out the week trading at $739.80, but ended the week trading at $742.50 per troy ounce up $8.30 or 1.13 percent. The index is currently below its 10, 50, and 200 week moving average, but 8 points away from crossing the 5 week moving average at $742.58.

On the oil front there have been price declines for 17 weeks from the all time high of $147.90 per barrel that was made in July. The index has been up 6 out of the 17 weeks but as for now we continue to see the index decline. OPEC oil ministers have been cutting production for the past 2 weeks, but that has not stopped the fall of the price of oil due to less demand by consumers as well as the production cuts not being effective. Oil started out the week at $61.80 per barrel but hit a 21 moth low at $55.50 per barrel but ended the week slightly higher. The oil index ended the trading week at $57.60 down $3.44 or 5.64 percent. I predicted that we may see oil move as low as $55 per barrel before heading higher but for now we may see much more declines in the price of oil going forward.

The chart that concerns many professional traders as well as non professional traders is the Volatility Index. This index is used to track investor confidence in the stock market also known as the fear index. As for now the index has been on a huge run which means that there continues to be heavy selling in the market due to investors getting out of stocks and moving into cash. The Index has declined for the past 2 weeks after reaching and all time high at 89.53 pulling back to its 10 week moving average at 53.93 before turning around and heading higher. The Volatility Index is currently above all weekly moving averages and is continuing to move higher. The Vix ended the trading week at 66.31 up 10.21 or 18.20 percent.


By: Marlin Rolle
*** Please have a close look at the charts below ***