As the first week of June 2011 passed in the stock market all three major market indices continued to decline. The Dow Jones Industrials, Nasdaq and the Standard & Poor 500 all moved lower for the sixth consecutive week. All three indices are down 7% to 8% from thier May 2011 price highs and currently are in oversold territory as the market continues to correct itself.
Most of the downside pressure was due to disappointing results from China that pointed out that the global economy continues to slump as the European Central Bank President Jean-Claude Trichet insisted that his institution would not offer further aid to Greece.
There was an uptick in the Volatility Index also known as the fear indicator. This indicator also called the (VIX) is a gauge that tracks investor confidence or non-confidence in market conditions. As more and more investors began panic selling taking the market lower the index had its biggest upside move in three months as it ended the week at 18.18 up +3.41 or 22.07%.
The Dollar also moved higher for the second consecutive month after several weeks of declines against 16 major currencies. The price of a barrel of oil as well as gold declined after Saudi Arabia would raise oil production as silver ended the week trading slightly higher. The gold index began the week trading at $1,546.78 per ounce but ended the week trading at $1.531.70 per troy ounce down $10.28 or -0.67%.
The silver index ended the week trading at $36.20 per ounce up $0.01 or +0.02% as the price of a barrel of oil moved lower for the second week in a row. The oil index ended the week trading at $99.81 down $0.93 or -0.92%.
There were no industries that survived the continued decline of the stock market this week. The S&P Chemical Index moved to the downside ending the week down -0.44%, followed by Utilities -0.52%, Health Products -1.56%, Banks -2.01% and Pharmaceuticals -2.14%. The airlines index was the worst performing industry as the market continued to move lower. The Airline index ended the week down -4.66%.
The top percentage gainers in the market as the major indices continued its decline were companies such as (ORS) Irsus Xelent Technologies +147.70%, (RCON) Recon Technology +82.88%, (JVA) Coffee Holding Co. +78.95%, (AXK) Accelr8 Technology Corp. +39.26%, and (TIN) Temple-Inland, Inc. +39.26%.
The Dow Jones Industrial Average began the week trading at 12,151.19 but moved to a price high in the 12,183.12 area before ending the week trading lower. The index has been on a decline in price for the past 6 weeks.
The Dow is now below 12,000 for the first time since March of 2011. The index is currently below its 5, 10, and 32 week moving average but above its 50 and 200 week moving averages. Downside support on the index was at 11,955.59 but that support was broken as the week continued. Downside support is now at 11,462.70 with upside resistance in the 12,876.10 area.
There was only one stock in the Dow 30 that moved higher this week as the other 29 stocks continued to follow the market lower. The stock that moved higher was (MMM) 3M Co +0.03% as (JNJ) Johnson & Johnson closed to end the week at -0.01% followed by (KO) Coca Cola Co. -0.21%, (MCD) McDonalds Corp. -0.22%, and (UTX) United Technologies Corp. -0.65%.
As the week came to a close, the Dow ended the week trading at 11,951.91 -199.35 or -1.64% on heavier than average trading volume of 3.49 billion. The average weekly trading volume for the Dow Jones Industrial Average is 3.48 billion.
At the Nasdaq Composite index there was a pullback in the tech weighed index as it also declined ending the week trading lower. The Nasdaq has been on a decline as it continues to move lower for the sixth consecutive week.
The Nasdaq began the week trading at 2,728.31 but moved much lower during the week in the 2,641.64 area before ending the week slightly higher. Previous downside support was broken as the index broke through the 2,711.90 area. Downside support in the week ahead is at 2,562.10 with upside resistance at 2,887.80.
As the index continued its decline there were a few winners in the Nasdaq 100 that moved higher to end the week. The top percentage gainers in the tech weighed index was (BBBY) Bed Bath & Beyond +2.52% followed by (FLEX) Flextronics Int’l., Ltd. +2.18%, (ILMN) Illumina Technologies +0.80%, (INFY) Infosys Technologies +0.80%, and (COST) Costco Wholesale Corp. +0.63%.
The Nasdaq ended the week trading at 2,643.73 -89.05 or -3.26% on heavier than average downside trading volume of 9.49 billion. The average weekly trading volume for the Nasdaq is 9.43 billion.
As for the Standard and Poors 500 there was no escape as the market continued its downturn. The index has been on a downside spiral for the past six weeks its longest downturn in almost three years. The S&P 500 began the week trading at 1,300.26 but continued to decline as the week went on. The index hit a low in price at 1,268.28 after breaking down below prior downside support in the 1,298.01 area.
Downside support for the index is at 1,226.50 with upside resistance at 1,370.70. The S&P 500 is currently above its 50, and 200 week moving averages but below its 5, 10, and 32 week moving averages.
The top percentage gainers this week as the S&P 500 continued its decline was (SEE) Sealed Air Corp. +6.99%, (AIG) American Int’l Group, Inc. +4.74%, (MCO) Moodys Corp. +4.44%, (BMS) Bemis Co, Inc. +3.33%, and (FRX) Forest Laboratories, Inc +2.85%.
The Standard and Poor 500 ended the week trading at 1,270.98 -29.18 or -2.24% on lighter than average downside volume of 14.10 billion. The average weekly volume for the S&P 500 is 14.93 billion.
By: Marlin Rolle
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