WizzWatch Market Newsletter 01.12. 09 – 01.16.09

For the week that passed in the market all major indices ended the week on the downside. The Nasdaq, the Dow Jones Industrial Average, the S&P 500, the Gold Index as well as the Oil Index all ended the week trading lower. There were 2.6 million jobs lost on 2008; financials as well as retailers all ended the week on the downside the worst week of trading since November.

At the Dow the index started out the week trading at 9,027.13 but ended the week trading lower. The Dow is currently below all of its moving averages. The index moved slightly above its 5 and 10 week moving averages a week earlier, but is now below its 5, 10, 50 and 200 week moving averages. The Dow has been moving in a sideways consolidation for approximately 12 weeks and needs to break above 9,475 in order to move higher. The Dow ended the week trading at 8,599.18 down 435.51 or -4.82 percent on heavier than average weekly downside volume of 4.31 billion. The average weekly volume on the Dow Jones Industrial Average is 4.51 billion.

The Nasdaq Composite Index was not able to escape the pullback being that it also ended the week on the downside. The index has been moving to the upside for 3 of its past 7 weeks of trading. The Nasdaq began the week opening at 1,626.19, but ended the week slightly lower. The Nasdaq is currently above its 5 and 10 week moving averages but below its 50 and 200 week moving averages. Average weekly volume on the Nasdaq is at 10.38 billion, but the index ended the week below its average weekly at 9.9 billion. For the Nasdaq to move higher it would need to break above its upside resistance at 1750. The Nasdaq ended the week at 1571.59 down -60.62 or 3.71 percent.

As for the Standard and Poors 500 Index it also ended the week trading lower. The S&P has upside resistance in the 980 area and once that resistance is broken we will then see the index move higher. The S&P is below its 50 and 200 week moving averages but slightly above its 5 and 10 week moving averages. The 5 week moving average is currently at 892.51 and the 10 week is at 883.92. The index opened for trading to start the week at 929.17, but ended the week trading at 890.35 down 41.45 or 4.45 percent on 18.31 billion trading volume.

The Gold Index slid lower this week after climbing to the upside for 9 out of 12 weeks. The index has been pulling back due to an upside move in the price of the U.S. Dollar after 5 weeks of downside moves in the Dollar Index. As for now we may see more downside in the price of gold if the dollar continues to rise in the near term. The Gold Index ended the trading week at $855.00 per troy ounce down - $24.50 or 2.79 percent after opening to start the week at $880.70 per troy ounce.

On the oil front there has been a huge downside move in the price of oil after a big spike the upside the week prior. The Oil Index opened up for trading at $47.04 per barrel and moved as high as $50.47, but ended the week trading lower. The spike in price the week prior was due to the conflict between Israel and Hamas in the Middle East, Russia and Ukraine pipeline issues as well as cuts in oil production by members of OPEC. After the job report that stated that the U.S, the world’s largest consumer of oil lost more jobs in 2008 than any other time since World War 2 it didn’t help to keep the price of oil moving on the upside. Analyst stated that demand will decline more rapidly for oil in the near term. I predict that oil will pull back to the mid or lower $30 range before heading higher. As the economic stimulus packages are put in place to boost economic conditions and more production cuts take place we will then see a rise in the price of oil. Oil fell from a high of $50.47 to end the week at $40.83 per barrel, its biggest weekly loss in 5 weeks. The Oil index ended trading to end the week down - $5.51 or -11.89 percent.

By: Marlin Rolle

*** Please have a close look at the charts below ***