WizzWatch Market Newsletter 08/03/09 – 08/07/09

As the financial market came to a close for the month of July the Dow Jones Industrial Average, the Nasdaq and the S&P 500 all ended the week trading on the upside. Earnings announcements from companies such as Motorola, Mastercard, General Electric, Wynn Resorts and Dow Chemicals all helped to push the market higher. The top performing indices for the week were gold and silver up 3.95% followed by the commodity related equity index up 1.31%, the bank index up 1.10 %, oil services up 0.94%, and chemicals up 0.83%. The worst performers for the week were disk drives, utilities, biotechnology, healthcare and telecommunications.

The Dow Jones Industrial Average moved higher to end the week for the third straight week after breaking above its 50 week moving average the week prior. The Dow Industrials opened the week trading at 9,093.09 and fell to a low of 9,007.47, but ended the week slightly higher below its weekly price high at 9,246.43. The Dow Jones Industrials was the biggest price mover for the month up 724.61 points or 8.58%. For now the index is above its 5, 10, and 50 week moving averages but below its 200 week at 11,275.87. Downside support for the Dow is at 8,647.69 and upside resistance is at 9,475.00. If the index continues to move higher the psychological level of 10,000 may not be too far away. The Dow Jones Industrials finished the week ending at 9,171.61 up 78.37 points or 0.86% higher on lighter than average trading volume of 4.71 billion. The average trading volume for the index is 6.31 billion.

At the Nasdaq Composite the tech weighed index finished the month of July up 7.82 percent. As for the week the index continued to move higher for the third consecutive week in a row. The index has been on the upside 17 of the past 24 trading weeks as it continues its advance. The Nasdaq started the week trading at 1,964.62 moved to a low of 1,946.95 before moving above the 2,000 point mark for the first time since September of 2008. The Nasdaq is currently above its 5, 10, and 50 week moving averages but below its 200 week at 2,221.30. All indicators continue to point higher as the index ended the week with a doji candlestick formation that represents indecision in the price of a stock or index. Based on the pattern the Nasdaq may continue higher, or it may move lower in the week ahead. If the index moves below the price low of 1,946.95 we will then see the Nasdaq head lower, but if it moves above its high of the week at 2,009.81 we will see the index continue to move higher going forward. Downside support is at 1,853.19 as upside resistance for the index is at the 200 week moving average. The Nasdaq ended the week trading at 1,978.50 +12.54 or 0.64 percent on volume of 11.13 billion. The average weekly volume for the Nasdaq is at 10.72 billion.

The Standard and Poors 500 also continued its run up breaking above upside resistance at 975.50 as it closes in on 1,000. Downside support for the S&P 500 is at 932.82. The last time the index was above the 1,000 area was October of 2008. The S&P began the week trading at 976.63 fell to a low of 968.65 and moved as high as 996.68 before pulling back. The index is currently above its 5, 10, and 50 week moving average but below its 200 week at 1,257.13. The moving average convergence divergence, relative strength, as well as other key technical indicators continues to point higher. The only thing that may change the direction of the S&P going forward is that fact the index ended the week with a doji candlestick formation like the Nasdaq, so we may see the index move lower or maybe much higher in the week ahead. The S&P 500 ended the week trading at 987.48 +8.22 +0.82% on volume of 23.89 billion. The average weekly volume for the S&P 500 is 22.25 billion.

In the gold markets this week there was a third week of upside momentum coming into the price of the precious metal. The Gold Index started to move sideways as it ended the week slightly above its closing price the week earlier. Gold started out the week trading at $951.60 per troy ounce and continued higher due to the drop in the price of the dollar against a basket of major currency pairs. The dollar has been on a pullback for the past four weeks. As the value of the dollar continues to move lower the price of gold will advance unless the dollar turns around and moves to the upside in the near term. For now the price of gold index will continues to move higher after 4 out of the past 9 weeks of upside. The Gold Index ended the week trading at $954.10 per troy ounce up $2.60 or 0.27 percent higher.

As for the oil index there was a huge pullback in the price of crude oil after opening at $68.05 per barrel to start the week. The oil index began the week trading on the upside but pulled back to a low of $62.70 before ending the week trading much higher. The pullback was a test of downside support near the 50 week moving average but that did not affect the price of oil as it continued to advance. Oil is up for the third consecutive week ending the week above its 5, 10, and 50 week moving averages, but below its 200 week moving average at $74.81. Upside resistance for a barrel of oil is at $73.90 with downside support at $62.32. Crude oil ended the week trading at $69.45 per barrel up $1.40 or 2.06 percent on the upside.

By: Marlin Rolle