WizzWatch Market Newsletter 11.24.08 – 11.28.08

For the past few months we have been seeing records being broken in the stock market due to downside pressure. For the week that past we have seen another as stocks plunge to the lowest levels seen since 1987. The Dow Jones Industrial average, The Nasdaq and the S&P 500 broke through major downside support. Oil prices dropped below $50 per barrel for the first time since 2005 due to recession fears. Gold turned to the upside late in the week as the Dollar pulled back slightly but continued its dominance over other currencies.

There is a lot of uncertainty in the market as the Volatility Index continues to move higher and analyst predict that we may not see a bottom in the financial sector until the third quarter of 2009. The index is very close to breaking a multi-year high due to the lack of confidence by investors that the market may not recover as soon as many hope. The S&P 500 had its worst week for the year currently down 46 percent, its worst decline since 1931. The stocks in the financial sectors continued to move lower as Citi Group decline 60 percent for the week.

The Dow Jones ended the week on the downside for the third week in a row. The Index came very close to declining to a low not seen since September 11, 2001 at 7416.17. The index broke through downside support from its low that was made 7 weeks ago at 7773.71 before ending the week slightly higher. The Dow is below it 5, 10, 50 and 200 week moving averages as it ended the week trading at 8,046.42 down -450.89 or -5.31 percent on heavier than average weekly downside volume on 9.18 billion.

The Nasdaq Composite Index has been declining for the past 13 weeks with 3 of those 13 weeks on the upside. We will have to see several consecutive upside days in order for the tech weighed Nasdaq to move higher. The index is currently below its 5, 10, 50 and 200 week moving averages. Downside support on the Nasdaq is at 1,192.42 being that the index broke through its last week low. The Nasdaq ended the week at 1,384.35 down -135.50 or -8.74 percent on 12.8 billion volume.

The S&P 500 had its worst decline since 1931 after declining for the past 3 weeks. The index hit a low at 741.02 before ending the week slightly higher. Downside support on the S&P is at 1108.49, a low that was made on September 11, 2001. The index is below its 5, 10, 50 and 200 week moving average like the Dow as well as the Nasdaq in order to stabilize the market. Everything that has been tried so far has not worked the S&P 500 ended the week trading at 800.03 down -73.26 or -8.39 percent on heavier than average weekly downside volume at 29.8 billion.

The Oil Light Crude Continuous Contract has been pulling back for 19 weeks as we continue to see gas prices drop dramatically at the pump. The average price for a gallon of gasoline is $1.99 in the United States. Oil has been on a price decline since reaching an all time high in price at $147.90 cents in July and is now trading below $50 per barrel. The Oil Index ended the week at $49.93 per barrel down -$7.67 per barrel or -13.32 percent. The index is currently trading below all of its major moving averages. Supplies may be cut 3.8 percent this month but we may continue to see the price pullback even further, to as low as $30 per barrel if the Dollar continues to move higher.

Over at the Gold Index we finally saw a move that signals a breakout may be coming soon. The index has been moving to the upside for the past 3 weeks but at a slow pace. In the next few weeks we may see gold move a lot higher as it attempts to cross above its 5 week moving average for the first time since June. Gold is below its 5, 10, 50 and 200 week moving averages. The index ended the week trading at 791.80 up +49.30 or +6.64 percent.


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