WizzWatch Market Newsletter 01.05. 09 – 01.09.09

To end the past week as we enter a new year all three major indices ended the week on the upside. The Dow, the Nasdaq and the S&P 500 all closed higher along with the Gold and Oil index. Home prices fell to record lows, factory orders fell to their worst levels since 1980 and oil jumped to end the week higher due to renewed fighting in the Middle East and cuts in production by OPEC oil ministers.

The Dow Jones Industrial Average is currently above its 5, and 10 week moving averages but below their 50 and 200 week. The last time the Dow was above its 10 week moving average was April of 2008. In order for the Dow to move much higher it would need to breakout above the 9500 resistance area. The Dow ended the week trading at 9,034.69 up 519.14 or 6.10% on volume of 2.56 billion.

Over at the Nasdaq there was also a sign of strength coming into the index but due to the holiday season there was very light volume coming into the index. The Nasdaq opened up the trading week at 1,530.02 but ended the week much higher. The index has moved above its 10 week moving average for the first time since September of 2008 and is in position to move higher but needs to break through resistance in the 1750 area. The Nasdaq ended the week trading at 1,632.21 up 101.97 points or 6.66 percent on volume of 5.56 billion.

After weeks of downside pressure the S&P 500 has finally started to make a move to the upside. The index is now above its 5 and 10 week moving averages. The (MACD) moving average convergence divergence, relative strength as well as on balanced volume have all been turning positive. The S&P, Nasdaq as well as the Dow Jones Industrial Average have all been in negative territory for the past few months. As for now the S&P 500 is poised to move higher but it will also need to break through resistance. The S&P will need to move above the 980 area on heavy volume in order for it to breakout and move higher after several weeks of negative movement. The index closed to end the week trading at 931.80 up 59.01 points or 6.76 percent on 10.0 billion trading volume.

On the oil front there has been 24 weeks of downside pressure but as of this week oil jumped from its December lows to end the week much higher. The jump in the price of oil is due to renewed tensions in the Middle East as well as production cuts from members of OPEC. There was also tension brewing between the country of Russia and Ukraine after the flow of oil was cut off. Oil opened up the trading week at $38.40 per barrel but closed to end the week trading at $46.34 per barrel up $8.63 or 22.89 percent. The oil index is currently above its 5 week moving average but below its 10, 50 and 200 week moving averages.

As for the gold index there was an increase in the price as gold ended the week higher for the forth consecutive week in a row. The index has closed on the upside eight of the past nine weeks due to the fall in the price of the U.S. Dollar against a basket of major currencies. The gold index is now trading above its 5, 10 and 50 week moving averages. Gold has been trending higher for the past few weeks but we may see a pullback in price due to the quick rise of the precious metal in the near future but it may also continue moving higher if the fighting in the Middle East does not come to a stop. The gold index ended the week trading at $879 per troy ounce slightly higher than its opening price at the beginning of the week at $873 up $8.30 or 0.95 percent.

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