WizzWatch Market Newsletter 05.18.09 – 05.22.09

As the financial markets came to a close on Friday, all three major indices declined ending the week on the downside. Stocks had their worst week in 10 weeks as the market declines after 9 consecutive weeks of advances. A nine week winning streak came to an end despite great earnings announcements as the market sold off taking the Dow Jones Industrial Average, the Nasdaq and the S&P 500 lower. For the week financials, industrials, utilities, transportation, and energy all ended the week on the downside as gold moved higher.

The Dow Jones Industrials opened the week trading at 8,569.23 but sold off due to heavy resistance in the 8,405.87 area. The Dow had its worst week since March. The Dow Jones Industrial Average has been in an uptrend for eight of the past ten weeks. The Dow is currently trading above its 5 and 10 week moving averages with downside support at 7,964.28. The index may head lower in the near term after weeks of upside momentum. The Down Industrials ended the week trading at 8,268.64 up 306.01 or -3.57% on heavier than average trading volume of 7.88 billion. Dow component (GM) General Motors was the worst performer falling -32.30 percent on heavier than average volume. The company stated that it will be closing 1100 automobile dealerships across the United States.

At the Nasdaq the index declined after a 9 continuous weeks of advances. The index is trading above its 5 and 10 week moving averages but below its 50 and 200 week moving average. The Nasdaq started the week trading at 1,715.52 but fell -58 points to end the week on the downside. The Nasdaq ended the week trading at 1,680.14 down 58.86 points or -3.38 percent on 11.6 billion trading volume. As for now all indicators are pointing lower. Downside support on the tech weighed index is at 1,621.41, if the Nasdaq breaks through downside support we will see the index turn much lower.

The Standard and Poors 500 also declined breaking the trend after moving to the upside for 8 of the past 10 weeks. The index is above its 5, and 10 week moving averages but below the 50 and 200 week moving averages. Downside support for the S&P is at 846.55. The S&P 500 ended the week trading to the downside at 882.88 down -46.35 or -4.99 percent on 25.9 billion trading volume.

As the market declines along with the Dollar the Gold Continuous Contract has continued to advance. The gold index has been making higher highs and higher lows for the past 3 of 4 weeks. The index is currently above the 5, 10, 50, and 200 week moving averages. The all time price high was $1,033.90 in March of 2008; the index came very close to taking out the high in February of this year but stalled. Gold is making an advance higher and there is a possibility that the index may breakout above its all time high but the first step is to move above the February high at 1,007.70. The Gold Index ended the week above its 10 week moving average in 7 weeks closing at $931.30 per troy ounce. The index rose $14.80 or 1.61 percent higher as the (MACD) moving average convergence divergence moves to the upside, a very bullish signal in a declining market.

On the oil front there was a decline after the index moved to 6 months highs at $60.96 per barrel. The (IEA) International Energy Agency cut demand for crude oil going forward due to the agency stating that oil consumption could decline the most since the early 1980’s. Inventories remain at their highest levels since 1989, there is a lot of supply but little demand as consumers continue to face economic woes. The Oil Index is currently above its 5 and 10 week moving averages but below the 50 and 200 week moving averages. Oil ended the week trading at $57.00 per barrel down $2.74 or 4.59%.

By: Marlin Rolle

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