Sunday, March 29, 2009

WizzWatch Market Newsletter 03.30.09 – 04.03.09

For the week that past the market continued to rally but we must keep in mind that we are still in a recession. All three major indices have been moving higher for the past three weeks. The Dow Jones Industrial Average, The Nasdaq and the S&P 500 are above their 5 and 10 week moving averages. After the U.S. Treasury stated that it would finance one trillion dollars to purchase distressed assets to help the financial sector, the bank index jumped 18 percent to end the week on the upside. The cyclical index, the transportation index, and oil index all ended the week higher, as the gold index moved lower. For the year the Nasdaq is down 2 percent, the S&P 500 down 9.7 percent and the Dow down 11.4 percent.


At the Dow Jones the index has been moving higher breaking above its ten week moving average for the first time in 11 weeks. The index has been moving with higher than average volume as the (MACD) moving average convergence divergence continues to turn. All 30 stocks in the Dow ended the trading week higher as the index has its biggest rally since November of 2008. The Dow ended the week trading at 7,776.18 up 497.80 points or 6.84 percent on 10.13 billion trading volume. In order for the index to break out into higher ground it would need to break above upside resistance at 9,088.06.


The Nasdaq Composite Index finished on the upside also after three weeks of upside movement. The index started out the trading week at 1,489.55 but ended the week trading higher. The Nasdaq has been on a run for the past three weeks. The index has been running into resistance in the 1650 area after moving in a sideways consolidation for the past several weeks. We are very close to approaching upside resistance at 1665.63. In order for the Nasdaq to begin moving out of bear market territory the index must break above upside resistance. The index ended the week trading at 1545.20 up 87.93 points or 6.03 percent on 11.36 billion volume.

The Standard and Poors 500 saw a big move this week as the index continued movinng to the upside. The index made its best two week move since 1938, with ninety nine percent of the stocks in the index ending the trading day on Friday on the upside. The S&P continued to make a move higher for the third week in a row but needs to break above 1,007.51 in order to move higher. Financials were the biggest movers in the index for the week. The S&P 500 ended the trading week above its 5 and 10 week moving average trading at 815.94 up 47.40 or 6.17 percent on 28.60 billion trading volume. Trading volume was lighter this week than the week before.

On the oil front we continued to see the oil index advance for the sixth week in a row. The oil index closed to end the week trading with a shooting star candlestick price pattern. There is a possibility that there might be a pullback in the price of oil going forward before the index moves any higher. Based on the trend analysis of the price of oil, the index will have downside support in the $45 per barrel area before it continues to move higher. Any move below $45 per barrel will take the price of oil even lower. Upside resistance for the oil index is at $55.98. The oil index ended the trading week at $52.38 per barrel up $0.31 or 0.60 percent.

After several weeks of continued upside movement there was a downside move in the price of gold. With the stock market turning to the upside the price of gold has been moving lower. The index has been trading above its 5 and 10 week moving averages for the past 19 weeks but as of the close of trading this week the gold index ended the week slightly below both its 5 and 10 week moving averages. The (MACD) moving average convergence divergence indicator has also signaled a warning sign that there might be a pullback coming in the price of gold. The index ended the week trading at $924 per ounce, down $28.30 or -2.97 percent.


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
















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