DOW Friday closing price - 12376

The DOW kept the recent uptrend intact generating another higher weekly close and in the process making a new 33-month intra-week high at 12419, above the previous 12393 high. Nonetheless, the bulls were unsuccessful in generating a new daily and weekly closing high, failing in the waning moments of Friday when oil prices spiked up to $110 a barrel.

In addition, the DOW was the only index that was successful in generating the new intra-week high, making the rally more of a Blue Chip rally than a market rally. As such, the validity of the rally is still in question.

On a weekly closing basis, resistance is decent at 12391. On a daily closing basis, resistance is decent at 12391. On a weekly closing basis, support is minor to decent at 11858, very minor at 11823 and then nothing until 11100. On a daily closing basis, support is minor at 12090 and minor to decent at 12058. Below that level, there is minor support at 11823 and decent to strong support at 11613.

The DOW is presently dependant on external fundamental factors, such as oil prices, Middle East unrest, possible defaults of the banking industry in Europe, and inflation. As such, chart patterns and history cannot be relied on as much as in past years. Nonetheless, April has generally been considered a month where rallies do occur. This has not been necessarily true prior to 2007, but the last 4 years have shown the index to rally in April, above March highs (in this case 12393), anywhere from 303 to 660 points. As such, if history does repeat itself it would have to be surmised that the index in April will get up to anywhere from 12700 up to 13000.

Above the recent high at 12393, there is no previous resistance of consequence until the 12750/12770 level is reached, and even then that resistance is only minor to decent. The strong resistance is found up at the 13000 level. If the bulls are successful in generating a rally above last week's high at 12419, one of those levels is likely to be the April high objective.

On a different note, though, the DOW has been very successful over the past 4 years in following a weekly trend line drawn using previous highs (not previous lows), both when the index was falling and since it has been rallying. This trend line is not being used to determine break down points but for determining upside objectives and resistance levels. The recent uptrend line started using the highs seen in Jan09 and since then the line has been touched on at least 3 occasions, with the last one being the 12393 high. With the DOW having made new intra-week highs last week, if the index continues higher and fundamental factors don't stop the rally, the objective using the up-trend line is 12610, at least as far as this coming week is concerned.

On a negative note, the DOW failed to make new daily and weekly closing highs on Friday, in spite of the new intra-week highs, the good economic news, and the positive momentum being experienced. If that failure is confirmed with a red close on Monday, the momentum may shift to the downside. In addition, the DOW failed to pull the other indexes up to make new 33-month intra-week highs, which further suggests the traders are unsure of the market in general.

It is evident that the trading range in the DOW this past week, between 12173 and 12419 is pivotal for what is likely to happen in April. A break above 12419 will likely bring in technical buying, while a break below 12173 will likely bring in technical selling. With no economic news of consequence due out this coming week, the traders are likely to follow whatever action is seen at the beginning of the week.

NASDAQ Friday closing price - 2789

The NASDAQ continues to show chart negativity in spite of the fact the index has rallied alongside the other indexes. The open gap on the daily chart between 2823 and 2808 that dates back to February 18th has not been closed or even gotten close to. In addition, the highs seen the first week of March at 2802 have been successful in holding the index back, though the same highs in the DOW and the SPX have already been broken.

In addition, in looking at the monthly closing chart of the NASDAQ, the index is presently in a pause basis as February's close was 2782 and March's close last Thursday was 2781. This is in contrast with the other indexes which continue to show higher monthly closes. With this index representing many of the more popular stocks in the market for the last 3 years, it is certainly evident that the "general" market is no longer "leading the pack" and that the buying is now being targeted to the safer more established stocks in the DOW. That, in and of itself, suggests a marketplace that will have problems going higher.

On a weekly closing basis, resistance is strong at 2833. On a daily closing basis, resistance is decent to strong at 2798 and strong at 2833. On a weekly closing basis, support is minor to decent at 2686 and decent 2643. Below that there is now support until the low 2500's are reached. On a daily closing basis, support is minor at 2722, minor to decent at 2686 and decent at 2616.

On a positive note, the NASDAQ tested the 50-day MA successfully on Tuesday with a drop down to 2720 and therefore has totally negated the previous break of the line in the weeks prior. Nonetheless, on Friday the index had an opportunity to break above the decent daily close resistance at 2798 as well as the psychological resistance at 2800 but even though the index traded above both of those levels intra-day it closed below them, giving notice that further upside will require help from somewhere. With no economic reports due out this coming week, the upside will be difficult to accomplish.

To the upside, the gap area between 2808 and 2823 has to be considered strong and important resistance. As long as the NASDAQ is unable to close the open gap left there in February, the probabilities will continue to favor the downside. In addition, the index does show decent intra-week resistance at 2802, which was seen on Friday as well, giving that level additional strength. The index closed in the middle of Friday's trading range so both Friday's high and low (2802 and 2779) are at risk of being broken on Monday. Whichever level is broken first is likely to generate further movement in that direction for a few days.

To the downside, the NASDAQ shows an open gap between 2756 and 2765 that should act as a magnet if Friday's lows at 2779 are broken. If that should happen, the gap should be closed. Nonetheless, further downside will be likely as no support is found until the 2720 to 2730 level is reached, where previous lows are found as well as the 50-day MA.

In the NASDAQ, contrary to the other indexes, the probabilities seem to favor the downside, though only by a slight margin.

SPX Friday closing price - 1332

The SPX was able to get above early March highs at 1332 as the index rallied up to 1337 on Friday. Nonetheless, unlike the DOW, the index was unable to get up the February high at 1344, leaving the Fibonacci retracement level untouched. The probabilities are high that the big traders are back to trading the SPX as the main index, not the DOW and if that is the case, the positive aspects of this past week's rally have to be downgraded as the index did not accomplish anything definitive.

The Fibonacci retracement level at 1343/1344 remains the strongest factor in the index, and likely in the overall market. Having established that exact level as a resistance, with no previous highs there, suggests that the Fibonacci number is the absolute key to what the indexes will do the rest of the year (not only for the immediate term). As such, until that level gets broken, the downside will remain the most probable direction.

On a weekly closing basis, resistance is decent to strong at 1343. On a daily closing basis, resistance is strong at 1343. On a weekly closing basis, support is decent between 1276 and 1279, minor at 1236 and decent at the 200-week MA, currently at 1190. On a daily closing basis, support is minor at 12978/1300, minor to decent at1276, and decent to strong at 1256. Below that, there is minor support at 1235, very minor at 1223 and decent to perhaps strong between 1178 and 1184.

The SPX also shows a gap between 1329 and 1331. Gaps in this index are so rare as to be considered an anomaly. Nonetheless, since a gap does exist, the probabilities are high that it will be closed. With the index having closed slightly below the mid-point of Friday's trading range, the probabilities seem to be high that on Monday the index will show red and close the gap.

The 50-day MA, currently at 1305, is likely to be a major key this week for the index. Not only is the MA there, but also the most recent low as well as the low for the week. A move below 1305 would likely signal an end of the recent uptrend as well as a successful retest of the highs.

To the upside, there is no resistance other than the 1343/1344 level which is the previous high as well as the Fibonacci retracement level. As such it is the key to further upside. A break above 1344 would likely bring the 1400 level as the objective to the upside. There is absolutely no resistance until 1383 is reached and even then the resistance there is minor.

The fundamental factors are weighing heavily on the market as oil prices continue to rally (last week reached $110 a barrel), the economic health of many European countries such as Greece, Portugal, and Spain, continue to deteriorate, the Middle East problems keep getting worse, and inflation is starting to grab headlines around the world. It is impossible to predict how much these events will affect the market each and every week as one week the traders are sensitive to these outside forces and the next week they are not. Fickleness seems to be the current state of mind of the traders. Nonetheless, in the overall outlook, these factors continue to be strong negatives that are likely to prevent further upside of consequence from occurring.

The bulls were relatively unsuccessful last week as the DOW was the only index that was able to made new 33-month intra-week highs. In addition, even in the DOW the bulls were not able to generate a new daily or weekly closing high, suggesting that the mini breakout failed and that selling pressure will be seen this week.

With no economic reports of consequence due out this week, traders will likely key on world events, with oil prices likely taking center stage. Any weakness seen this week, where the indexes go below last week's lows, is likely to cause a shift of emotions to the downside. The bulls continue to have the short-term momentum but there is no harmony among the indexes and that could be the deciding factor. The DOW shows that higher prices are likely, the SPX is on the fence, and the NASDAQ shows that probability favors the downside. With such disarray among the indexes and no economic reports due out it is unlikely the bulls will gain enough power to overcome the negatives being seen. Probabilities slightly favor the downside.