WizzWatch Market Newsletter 05.26.09 – 05.29.09

To end the week of trading, the Dow Jones Industrial Average, the Nasdaq Composite Index and the Standard & Poors 500 all ended the week on an up note. All three major indices ended the week trading slightly higher to the upside. Material stocks lead the way as the biggest gainers to end the week. Retailers (TGT) Target and (SHLD) Sears Holdings moved higher due to positive earnings announcements. Crude Oil closed to end the week above $61 per barrel as the U.S. Dollar falls against a basket of major currency pairs. The dollar had its worst week since March and Gold continued to move higher. There were as 13 stocks that moved higher in the Dow 30 as 17 declined to end the week lower.

The Dow Jones Industrial Average has been on the upside for 9 of the past 11 weeks. As for now the index has been moving in a sideways consolidation slightly below upside resistance at 8,407.87. The index broke through resistance levels 2 weeks prior but failed to move any higher. The Dow Jones Industrials has been overbought for the past 8 trading weeks but continues to move higher. The index crossed below its 5 week moving average for the first time since its initial breakout in March. The 5 week moving average is currently at 8,281.86 but above its 10 week moving at 8,069.62. As for now downside support is at 7,964.28, a move below support will take the Dow even lower. We may see a pullback to test the lows that were made on early March of this year at 6,469.95. The Dow Jones Industrial Average ended the week trading at 8,227.32 up 8.68 or 0.10 percent on 8.28 billion trading volume.

At the Nasdaq Composite Index there were a few similarities to the movement of the Dow as the index closed to end the week slightly higher. The Nasdaq closed to end the week with a long upper shadow candlestick which represents that the buyers dominated trading earlier in the week but sellers won the battle at the end of the week taking the Nasdaq to a lower close. The tech weighed index has been on the moving to the upside for the past 10 out of 11 weeks and is now moving in a sideways consolidation with downside support at 1,621.41. A break of downside support will take the Nasdaq to the downside but a move above 1,775.00 will take the index much higher. As for now the index is showing signs that there may be a pullback to come in the short term. The Nasdaq ended the week trading at 1,692.01 +11.87 or +0.71 percent on 10.1 billion trading volume. The Nasdaq is below its 5 week moving average at 1,704.93 but above its 10 week moving average at 1,647.46.

As for the Standard and Poors 500 the index has been on the upside for 8 of the past 11 weeks. Downside support on the index is currently at 846.55. The index finally broke through its 5 week moving average at 888.57 for the first time in 9 weeks. The uptrend stalled about 2 weeks as the index failed to break above the 931 area. To end the week the S&P 500 ended the trading week at 887.00 up +4.12 points or +0.47 percent on 23.5 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 ***