DOW Friday closing price - 12380

The DOW was able to keep the recent weekly close uptrend intact generating another higher weekly close, above last week's close at 12376. In addition, new 33-month intra-week highs were made with a rally up to 12450. Nonetheless, the bulls were unable to generate a new 33-month weekly closing high as the index continued to close below the high weekly close seen the week of February 14th at 12391, in spite of the strong April rally history.

By the same token, it is impossible to use the action seen this past week as an indicator of what will happen this coming week in the DOW as there was much uncertainty surrounding the market due to the infrequent budget issue that was unresolved as of Friday afternoon when the market closed. As such, this past week is likely to be seen as a non-event week, especially since the budget issue was resolved late Friday evening.

On a weekly closing basis, resistance is decent at 12391. On a daily closing basis, resistance is decent at 12391 and very minor at 12400 and 12426. On a weekly closing basis, support is minor to decent at 11858, very minor at 11823 and then nothing until 11100 is reached. On a daily closing basis, support is minor at 12319 and again at 12197. Below that level there is minor to decent support between 12090 and 12058.

This past week can be mostly erased from the charts as nothing was truly accomplished by either side (bulls and bears). Nonetheless, from a purely technical basis the DOW does show a possible double top on the daily chart at 12450 when that high was seen both on Wednesday and Friday. In addition, Friday turned out to be a reversal day with higher highs, lower lows and a close in the red, making the possible double top an issue to be addressed on Monday, especially now when the budget issue has been resolved. This kind of action will take on additional meaning if the index is able to get below Friday's low at 12320 on Monday, as well as generate a close below 12319, as that would be a sell signal on the daily closing chart.

The probabilities do not favor such an event happening as one of the main factors keeping the indexes under selling pressure on Friday was removed when the budget issue was resolved Friday evening. Nonetheless, on the negative side the budget issue was not the only problem the market faced on Friday as oil prices climbed above $113 and that is a factor that is getting difficult to ignore, especially since oil prices are more likely to keep on climbing than not.

This coming week a new catalyst will be introduced in the form of the 2nd quarter earnings reports coming out starting on Monday with AA reporting after the market closes, followed by JPM on Wednesday, GOOG on Thursday and BAC on Friday. So much of the bull case has been built on the expectations that earnings and guidance will continue to improve that if that does not turn out to be the case, disappointment will be rampant.

Nonetheless, with the budget issue resolved, AA not reporting until after the market closes on Monday, and April being historically a positive month, it is not likely the oil issue will keep the indexes down to begin the week. As such, I expect that the initial reaction on Monday will be to rally the DOW, try to take out the potentially troublesome double top, and renew the positive feelings that have been around for the last 3 weeks.

In the DOW chart there is no intra-week resistance above, other than the previous weekly close at 12391, until the 12750 level is reached. As such, if the index is able to get above 12450 on Monday and the earnings reports come out as anticipated throughout the week, further upside should be seen. To the downside, a close below 12319 would be a sell signal and if generated will likely take the index back down to the 12000 level at least.

The monkey wrench in this scenario is oil prices. It was mentioned this past week by one analyst on Bloomberg TV that the market could absorb up to $120 a barrel and still go higher, but that above $120 it would affect the economy in a very negative way. The price of oil rose over $8 this past week and if that happens again this coming week, the $120 mark would be reached.

In the DOW there is a lot of uncertainty at this time and no clear chart signals have yet been given on either side. As such, waiting for the news to come out this week is the only thing to do. Probability numbers are about even as world economic factors suggest the downside is likely, whereas trend, history, and momentum favor the upside.

NASDAQ Friday closing price - 2780

The NASDAQ continues to show some chart negativity in spite of the fact the indexes in general have remained positive. The bulls had several opportunities this week to establish a bullish case for the index, but in each case the attempts failed. To begin with, the open gap on the daily chart between 2823 and 2808 that dates back to February 18th almost got closed with a rally up to 2815, but in the end it did not happen. In addition, the index closed below last week's close at 2789, suggesting that a successful retest of the 10-year high weekly close at 2833 has now occurred. If confirmed next week with another red close, the retest will be considered successful. To finish it off, the index had a reversal week making a new 7-week high but then closing in the red.

The NASDAQ has continued to lag all other indexes and having been the leader to the upside for the past 3 years confusion reigns as traders are having problems determining the overall meaning for the change of leadership.

On a weekly closing basis, resistance is minor at 2789 and 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 to decent between 2722 and 2745, minor to decent again at 2686 and decent at 2616.

The NASDAQ, with a second close at the psychologically important 2800 level this past week (closed previously at 2798 and this past week on Wednesday at 2799), has now made that level, on a daily closing basis, into an important pivot point. With the expectations that the resolution of the budget on Friday will bring in renewed buying interest on Monday, that level is likely to be a strong chart determinant to what the traders will do this week. Having closed 20 points below that level on Friday, it is unlikely the index will close above that level on Monday, though getting up to that level is a high probability. Nonetheless, after the AA earnings report on Monday afternoon comes out, some clearer signs are likely to be seen on Tuesday. Nonetheless, that level will continue throughout the week to be an important pivot point. GOOG, a NASDAQ stock, does report on Thursday after the close and that could become an important catalyst.

The NASDAQ chart overall has turned "slightly" negative, in direct contrast to the other indexes. Keep in mind that the index made a new 11-year weekly closing high in February and then proceeded to give a confirmed failure to follow through signal which puts the onus strongly on the shoulders of the bulls to negate all of that. So far they have been unable to do accomplish it and the index remains in a "sell" mode.

To the downside the NASDAQ does not have any strong support area that if broken would bring in new and strong selling, but a break of the 2722 to 2730 area, on a daily closing basis, would likely trigger an increase in selling. If that does happen, the possibilities of a drop down to 2500 will increase quite a bit.

As such, you are looking at two areas this week that on a daily closing basis would be somewhat indicative, though not definitively so. The areas are 2800 to the upside and 2722 to the downside. The upside is most likely to be tried first.

SPX Friday closing price - 1328

The SPX, like the NASDAQ, generated a red close on Friday below last week's close at 1332, suggesting a successful retest of the 1343 weekly closing high has been made. If confirmed next Friday with another red close, technical selling will increase.

The SPX will receive 2 important earnings reports this week with JPM and BAC reporting. Expectations are for JPM to be much better than last year and for BAC to be flat. Any negative discrepancy, especially with JPM, could push the entire financial industry down, especially when considering the financial woes being seen presently in Greece, Portugal, and even Spain. The financial industry continues to be the Achilles Heel of the market at this time.

On a weekly closing basis, resistance is minor at 1332 and decent to strong at 1343. On a daily closing basis, resistance is minor at 1335 and 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 very minor at 1325, minor to decent at 1306, minor do decent again at1298/1300. Below that level, minor to decent support is found at1276, and decent to strong at 1256.

The 75% Fibonacci retracement level at 1343/1344 remains the strongest factor in the b>SPX, 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.

There were several small chart negatives seen this past week in the SPX starting with the failure to get up above the previous high at 1344 (got up to 1339) when the DOW did go above its previous high 2 weeks in a row. In addition, the index had a reversal week having gone above the previous week's high but then closing in the red. The same can be said about having a reversal "day" on Friday. Technically speaking, if the index can get below Fridays low at 1322, it will set up Friday's high at 1339 as a successful retest of the 1344 high and that would likely bring in increased chart selling. Nonetheless, all chart signals given this past week have to be taken with a grain of salt due to the extraordinary situation that came up with the government shut down. Now that it has been resolved charts will again have some meaning.

To the downside the SPX does show several short-term levels of support with the 1310/1311 level being the first. At that level the 50-day MA is currently at and that is a MA that has been important for the last year. The index does have a rare open gap between 1319 and 1321 that will be a major magnet if the index does not generate any buying on Monday off of the agreement to keep the government running. The index did close in the lower half of last week's trading range, as well as Friday's trading range, and if follow through to that weakness is seen on Monday, the probabilities of the index dropping all the way down to 1310/1311 will be high.

To the upside, it is all about 1343/1344. A break above that level will open the flood gates for the bulls and likely generate a run up to the 1400 level.

Once again the indexes seem to be giving mixed signals inasmuch as the DOW looks to go further to the upside, the SPX seems to be pausing at an important resistance level, needing positive news to go higher, and the NASDAQ is giving failure signals everywhere. With such a discrepancy, traders continue to be confused.

Nonetheless, this coming week is likely to start clearing up some of the confusion as there are earnings and economic news of some importance that could help wipe away some of the fog. There are 4 earnings reports of consequence this week with AA, JPM, GOOG, and BAC reporting. With the financial industry being the Achilles Heel of the market right now, the JPM and BAC reports could have some impact. In addition, on the economic front, Retail Sales comes out on Wednesday, followed by PPI on Thursday, and CPI, Capacity Utilization, Industrial Production, and Michigan Sentiment on Friday. Though none of these reports on their own would be a strong catalyst unless way out of line, inflation is certainly a topic of conversation recently and these reports are mainly keyed to that front. As a whole, though, they could have a strong impact if everything points one way, especially to the downside.

On the other side of the coin, if earnings reports continue to show increased profits, upward guidance, and recovery of the economy, and none of the potentially bad situations explode, there is nothing to stop the indexes from repeating the April rally factor that has been seen the last 4 years.