WizzWatch Market Newsletter 01.20.09 – 01.23.09

The Dow Jones Industrial Average continued to slide for the second week. The index continues to move in a sideways consolidation between the low of 7500 and a high of 9600. As for now the Dow is below its 5, 10, 50 and 200 week moving averages. The Dow has fallen of 700 points in the past 2 weeks. Last week the Dow fell 435 point or 4.32 percent and this week the saga continued. The Dow Jones Industrial Average ended the week trading at 8281.22 down -317.96 points or 3.70 percent on 7.77 billion trading volume, higher than the average weekly volume of 4.62 billion.

The Nasdaq Composite Index pulled back for the second week in a row. The index has fallen below its 10 week moving average but is slightly above its 5 week moving average. The Nasdaq is also below its 50 and 200 weekly moving averages. Relative strength has been weakening as the (macd) moving average convergence divergence continues to move on the upside for now. Volume was very high to end the week above the average weekly at 10.38 billion. The Nasdaq ended the week trading at 1,529.33 down -42.26 points or 2.69 percent on 10.399 billion volume.

At the Standard and Poors 500 there was no differentiation in the movement of the index in comparison to the Nasdaq or The Dow Jones Industrial Average. The S&P saw its second week of downside pressure. Still trying to stick its head above ground the S&P saw its relative strength move to the downside along with the money flow. The (macd) is currently on the upside but if more downside pressure comes into the index the (macd) moving average convergence divergence will soon follow.

Gold pulled back for the second week in a row slightly below it 10 week moving average. One of reasons for the pullback is due to the third week of the continuation in the strength of the U.S. dollar in comparison to a basket of major currencies. The index is also below its 50 and 200 week moving averages, but above it 5 week moving average. As for now this pullback seems to be a short one for the price of gold, but all we can do for now is wait to see what next week brings us with so much tension building around the world. Gold ended the week trading at $839.90 dollars per troy ounce down $15.10 or 1.77 percent to end the trading week.

As for the Oil Index we are starting to see a move coming into the price of oil. Oil has been pulling back since its all time high that was made 27 weeks ago at $147.97 per barrel. OPEC members have been making cuts in production since November of 2008 and we have been continuing to see the price fall. I predicted that oil may move as low as $30 per barrel or may be even lower before turning higher. Any move in the price of crude above $52 per barrel we will then see the oil index run above $100 per barrel. With a President Obama in office will we continue to see oil move higher, most may ask. If President Obama plans to back the solar industry as well as other alternative energy sources 100% and the oil index is the barometer for solar wouldn’t the price of oil have to move higher. The answer is yes, and my alternative is to separate solar power from oil so that it can run freely in a sector of its own. The oil index closed to end the week above its 5 week moving average but below its 10, 50 and 200 week moving averages. The relative strength index as well as the (macd) are both turning slightly to the upside, but closed to end the week with a black candlestick candle. Black candlesticks represent negativity so therefore we may see the oil index move higher or maybe even lower in the short term. Oil ended the week trading at $42.57 per barrel up 1.74 points or 4.26 percent.


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

By: Marlin Rolle