WizzWatch Market Newsletter 05.11.09 – 05.15.09

As for the past week in the stock market there was continued upside in all three major indices. The Nasdaq continued its run up for the 9th consecutive week. The Dow Jones Industrial Average and the S&P 500 have been moving higher for 8 of the past 9 weeks. The move higher was due to the financial stocks moving higher after the government stress tests of banks were released. The test were not as bad as many investors feared as financials ended the week as the best performers taking the market higher. The Dollar had its worst week since March declining against a basket of major currencies as better than expected payroll and housing sales numbers showed that economic conditions may be getting back to normal.

The Dow Jones Industrial Average started out the week trading at 8,213.60 but ended the week trading higher after breaking above resistance at 8,405.87. The index is poised to move higher despite the fact that the market has been overbought for the past 3 weeks. Investors should be very careful going forward making sure they have a stop loss in place for the possibility of a pullback. The Dow Jones industrials are currently above its 5 and 10 week moving averages, but below its 50 and 200 week moving average. The Dow ended the week trading at 8,574.65 up 362.24 points or +4.41% for the week on 11.4 billion trading volume.

At the Nasdaq Composite the tech weighed index has been on a phenomenal 9 week run. The index ended the week with a doji candlestick. Doji’s represent indecision in the price of a stock or indices. This means that the index may go up or down in the coming week. The index is above its 5, 10 and 32 week moving averages but below its 50 and 200 week moving averages. The 50 week moving average is at 1,849.10 while the 200 week is currently at 2,241.07. Upside resistance on the Nasdaq is at 1,896.95 slight above the 50 week moving average. The last time the Nasdaq was above its 50 week moving average was December of 2007 since then the index has been on a decline falling below the 2600 area. The index ended the week trading at 1,739.00 up 19.80 point or 1.15% on 14.3 million trading volume.

The Standard & Poors 500 was the biggest mover of all three major indices. The S&P ended the week on the upside for the second week in a row. The index has been on the upside 8 of the past 9 weeks making higher highs and higher lows. Upside resistance for the index is at 975.50 with downside support at 805.19. The index is above its 5 and 10 week moving averages but below its 50 and 200 week moving averages. The index may move higher in the near term but will run into resistance in the 975.50 area slightly below its 50 week moving average at 1,014.57. The S&P 500 ended the week trading at 929.23 up 51.71 points or 5.89% on 32.9 billion trading volume.

Over in the gold markets there has been a decline in the price of the precious metal 9 of the past 11 weeks as the market continued its upside move. All indicators are pointing to a higher price move going forward as the 12,26,9 moving average convergence divergence starts making a move to the upside. The index is currently above all major moving averages after ending the week slightly above its 5 week moving average for the first time in 6 weeks. The Gold index ended the week trading at $916.50 per troy ounce up $30.10 or 3.40%.

At the (NYMEX) New York Mercantile Exchange the price of oil continued to move higher after breaking above upside resistance at $55.98. The last time that the oil index has been above $56 per barrel was 24 weeks ago. As for now the oil index is poised to move much higher as we head into the summer. This is the time of year that consumers prepare for the summer driving season, hurricanes as well as a rise in the price of natural gas, heating oil as well as the price at the pump. Historically oil as well as commodities move higher between the months of May through October so we may see higher gas prices at the pump in the weeks to come. To end the week oil ran up huge breaking through resistance closing at $59.74 per barrel up $6.54 or 12.29% to end the week. Oil is now above its 5 and 10 week moving averages but below its 50 and 200 week moving averages. Oil is currently down 51% from its July 2008 high of $147.90.

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