DOW Friday closing price - 15425

The bulls in the DOW were unable to generate any additional buying this past week in spite of the strong upside momentum and close on the highs of the day the previous week. It does seem evident the bulls need constant positive news and/or constant statements from Fed Chief Bernanke to keep the uptrend intact and they received none of those this past week. Nonetheless, the DOW bears have also been unable to accomplish anything as there seems to be mostly profit taking occurring in the index rather than new selling. The index did close over 200 points lower on Friday below the previous Friday's close but the previous all-time high weekly close at 15354, as well as the previous all-time high daily close at 15409 were not broken on a closing basis, keeping the uptrend intact.

The DOW will be facing a decent amount of economic reports this coming week though none of them are considered catalytic, meaning that they might nudge the market in one direction or the other but not likely cause any dramatic moves. Nonetheless, the index is facing a crisis of belief as many hedge and institutional investors/traders have stated recently that they are slowly decreasing their holdings and not adding any new positions until the market is once again an attractive purchase, meaning at lower prices than presently being seen. These traders do not believe "much" further upside can be accomplished at this time, but not yet ready to say the index is heading substantially lower as to become bears.

On a weekly closing basis, minor resistance is found at 15658. Above that level there is no resistance. On a daily closing basis, very minor resistance is found at 15498, minor resistance at 15567, and minor to decent resistance at 15658. On a weekly closing basis, support is minor at 15354 and decent at 14799. On a daily closing basis, support is minor at 15409 as well as between 15296 and 15318. Below that level, support is decent at the 15000 demilitarized zone and decent to perhaps strong at 14659.

The DOW closed near the lows of the week and further downside is expected to be seen with the general support at 15300 as the first intra-week downside objective to be seen. On a daily closing basis, the index does show 4 previous daily closes between 15294 and 15318 that do give that level some additional support (other than general) but the level itself is not considered anything more than minor support. The probabilities do favor the index moving down to that level on Monday since the index closed weakly on Friday and there are no scheduled economic reports of consequence due out until Tuesday. Nonetheless, starting Tuesday and for the rest of the week there are quite a few economic reports that will likely influence how the traders act thereafter. Any daily close below 15248 will likely give enough ammunition to the bears to take the index down to the 15000 demilitarized zone.

The DOW did get up near an upside general resistance at 15700 the past 2 weeks with rallies up to 15658 and 15655 that might suggest the general resistance there is being felt. Nonetheless, since no damage of consequence to the downside was done to the chart this past week, the probabilities still favor that level being broken and at least the 15700 area reached. By the same token, 15700 is just general resistance and if the bulls are able to break and close above that level, the 16000 level will remain a psychological magnet.

The probabilities favor the DOW showing weakness early in the week and then moving up the rest of the week as the economic reports come out. The economy has been showing improvement as of late and there is little reason to think that the reports this week will turn negative. With new information to trade with, the bulls are likely to use it to make new highs, keeping the uptrend intact.

NASDAQ Friday closing price - 3660

The NASDAQ technically had a negative reversal week, having made a new 13-year high and then closing in the red. Nonetheless, the high above the previous week's high was only 5 points and the bulls were able to generate enough buying late in the week to close just slightly below the mid-point of the trading range and 27 points above the low, suggesting that the reversal was not seen as negatively by the traders as a true reversal would be. The index did close near the lows of the day on Friday and in the lower part of the week's trading range, suggesting that some further downside below last week's low at 3633 will be seen this week. Nonetheless, with the chart still looking positive even if that scenario occurs, it is not likely that anything negative of consequence will occur until after the economic reports come out, and then only if those reports are negative.

The NASDAQ continued to outperform the other 2 indexes, as far as the upside is concerned, and as long as that continues the probabilities will favor the bulls. The main stocks in the index (AAPL, AMZN, NFLX, and PCLN) continue to show a positive chart outlook and until that scenario changes, the bears will have a tough time changing the minds of the traders.

On a weekly closing basis, there is minor resistance at 3689 and then no resistance until decent resistance is found between 3860 and 3887. Above that level, there is minor to decent resistance at 4004 and decent to perhaps strong between 4234 and 4246. On a daily closing basis, there is very minor resistance at 3669 and minor at 36.92. Above that level there is no resistance in the last 12 months. On a weekly closing basis, support is minor to decent at 3357 and decent at 3202/3206. On a daily closing basis, support is very minor at 3654 and minor at 3611. Below that, there is minor support between 3579 and 35.87. Below that level, there is minor support at 3502 and minor again at 3459.

The NASDAQ stalled this past week but the selling was not sufficient to break any levels of support, not even very minor ones, meaning that the uptrend is still intact. The only negative that can be said about the NASDAQ is that the index did not follow through to the upside on the spike-type rally and close on the highs of the week last week, and no resistance above. Nonetheless, after a 395 point rally over the past 7 weeks, it certainly is not surprising that some profit taking is being seen, or a pause happening as new fundamental information is awaited.

There are no close-by levels of support of resistance in the NASDAQ that mean much right now. To the downside, the previous 13-year high weekly close at 3498 is important and to the upside, the April 2000 weekly close at 3860 is also important, but both of those levels are 160 to 260 points above and below Friday's close (respectively) and not likely to be "in play" this week. As such, the traders will likely await the fundamental news that is due out this week before making any decisions, be it short-term or longer term.

The NASDAQ is likely to start to the downside this coming week as the index closed near the lows of the day on Friday. There is some minor intra-week support at 3633 that should hold but if broken would likely push the index down to the previous 10-day congestion area around 3600. The 3675 level does show some minor resistance and if broken would likely cause the high at 3694 to be tested and probably broken as well.

Expect some weakness early in the week and then some strength later on in the week if the economic reports do not disappoint.

SPX Friday closing price - 1691

The SPX mostly spun its wheels this past week as the index had an inside week with lower highs and higher lows than the previous week, suggesting that there is very little interest in it right now. The index did close near the lows of the week, suggesting that the first course of action for the week will be to the downside but it is evident at this time that the traders are waiting for more fundamental information before making any waves in either direction.

The SPX has built a minor and a bit haphazard Head & Shoulders formation with the left shoulder at 1698, the head at 1709, and the right shoulder at 1700. The neckline is presently at 1684 and if broken would offer a 1659 objective. Nonetheless, there is no similar formation on the weekly chart, meaning that the traders will not have great confidence in the formation itself. Nonetheless, it is there and it could cause the index to drop down an additional 32 points.

On a weekly closing basis, there is minor resistance at 1709. On a daily closing basis, there is minor resistance at 1697 and minor to perhaps decent at 1709. On a weekly closing basis, support is minor at 1667 and minor to decent at 1592, minor to perhaps decent at 1558/1561, and decent between 1553 and 1555. On a daily closing basis, support is minor at 1685 and minor to perhaps decent between 1669 and 1676, minor at 1649, and very minor 1634.

The SPX has now traded for the past 3 weeks between 1685 and 1709 with 90% of the trading being under 1700. It is becoming evident that the bulls are having trouble stimulating new buying above 1700 and it has to be especially worrisome to the bulls since there is no resistance above that level and yet the fundamental news has all been positive the last 3 weeks. The 1700 level has been a fundamental target for the year for many analysts and it seems that additional fundamental positives will need to come out to generate any new buying interest.

To the downside, the SPX is starting to show support being built between 1670 and 1685. A break below 1671 would be a new 4 week low and suggest that a top has been found. A weekly close below 1667 and/or a daily close below 1669 would give a failure to follow through signal that at this stage of the rally and of the year would likely be a strong sign that a top (perhaps a major one) has been found. There is yet no action seen that would indicate that this scenario is likely to occur but knowing the parameters is important because if it happens, the selling would likely be immediate and strong.

The bull rally is on pause as the traders await the economic reports due out this week in order to measure just how much more the economy is recuperating and if further upside can yet be seen. Retail Sales comes out on Tuesday, PPI on Wednesday, CPI, Empire Manufacturing, Industrial Production/Capacity Utilization, and Philadelphia Fed on Thursday, and Housing information and Michigan Sentiment on Friday. None of these reports are catalytic but there are enough of them this coming week that traders can get a good measure of whether the recovery is ascelerating and further upside can be seen or whether the rally has run its course.

It is likely that a top to this rally is "just around the corner", but the exact time and level where the top will be built is impossible to evaluate at this time since there are no resistance levels yet built where the traders can concentrate their selling interest and no trading clue yet that would suggest that a top has been found. As such, the traders will continue to have a bias to the upside and purchase rather than sell until that no longer works.

This coming week favors the bulls since the bears have still not been able to accomplish anything negative on the chart other than pause the rally. In addition, most of the recent economic reports have come out better than expected and that will likely continue this week, leaving the bears with no ammunition yet to press down. Nonetheless, the market showed this past week that no longer can the bulls count of momentum for higher prices and that means they will "need" to see better reports to keep the rally going.