DOW Friday closing price - 15248

The DOW had a yo-yo kind of week with weakness mid-week after the manufacturing numbers came in lower than expected and strength late in the week after the Jobs report came in better than expected. The index closed near the highs of the week's trading range suggesting further upside above this past week's high at 15255 would be seen this coming week.

The DOW tested the 50-day MA, currently at 14945, successfully with a close at 14960 on Thursday followed by a green close on Friday. The 50-day MA is always a strong indicator of trend and the action seen at the end of the week means there is a good chance that the uptrend will resume and that the correction seen the past couple of weeks is the same as has been seen twice before this year. If that turns out to be the case, it would mean the seasonal correction will not occur this year.

On a weekly closing basis, there is minor to perhaps decent resistance at 13354. On a daily closing basis, there is minor resistance at 15254, minor to perhaps decent 15383 and decent at 15409. On a weekly closing basis, support is minor at 15115, minor again at 14547 and then nothing until minor support is found again 14093 and again at 13981. On a daily closing basis, support is minor at 15115, decent at 14960, minor again at 14887 and a bit stronger at 14687.

The DOW will be facing a very important chart week this coming week as the bulls will be committed to making new all-time highs if the index goes above last week's high at 15255, otherwise the rally could be considered simply a retest of the all-time highs on the weekly chart which if confirmed would give the bears all the ammunition they need to implement the "sell in May and go away" seasonal correction. The bulls will not get any help fundamentally this coming week as there are no economic reports of consequence scheduled, which in turn means that the probabilities of success are low.

To the upside, the DOW shows minor but possibly indicative resistance at 15304 that offers additional strength from the fact it is also a general resistance level (300 points above the 15000 level). If the bulls are unable to get above 15304 on Monday it will probably disappoint the traders as the action on Friday was strong (211 point rally) and suggests strong follow through immediately of commensurate strength. A break above 15304 would suggest further upside with 15389 as the objective, which in turn would leave the bulls with a very small obstacle to overcome thereafter, needing only 50 additional points to the upside to make a new all-time high and resume the uptrend. By the same token, even if such a rally occurs the bears would still have to prevent the uptrend from resuming as a failure at 15380 would be considered a retest of the highs on the weekly chart and a strong retest of the double top at 15542/15521.

It does behoove the bears in the DOW though, to defend the 15300 area strongly as a rally up to that level would fulfill the need for a retest of the highs on the weekly chart (getting above last week's high at 15255), make a small statement by having the general resistance at 15300 hold up, and show that Friday's momentum was just a 1-day wonder.

To the downside, the DOW will show some indicative support at 15115 which was the low seen on May 31st as well as where the 200 10-minute MA is currently located. Further support on Monday will be found at 15044 which was Friday's low. The stronger support, at least on a daily closing basis, is found at the 50-day MA at 14945 which after being tested successful on Thursday would offer a strong reason to sell if broken now. It should be mentioned that Friday's late low was 15163 and if broken could end up causing a domino-like effect to the downside.

The DOW is facing an important week inasmuch as the action this past week has set up this coming week with a boom or bust scenario. The fact that there are no economic reports of consequence scheduled makes the task even harder as the traders will have no fundamental information to help them decide what to do and therefore it will all be about charts. The probabilities favor the bears as fundamentally the economic reports continue to show a slowdown of the economy in spite of the Fed doing what it has done. By the same token, reason has not been present much this year and the "trend is your friend" is an adage that always rings true, and the trend is still up.

NASDAQ Friday closing price - 3469

The NASDAQ, as seen through the eyes of a bull, continues to show many chart reasons to believe the index is heading higher. The index, based on the weekly closing chart, has traded in a narrow trading range for the past 4 weeks with the high close being 3498 and the low close being 3455. The action is more in tune with a pause to get rid of the overbought condition than it is with a topping out pattern or even a small corrective phase. Simply stated, the probabilities continue to favor the bulls.

On an intra-week basis, the bulls in the NASDAQ accomplished quite a few positive things this past week starting with the most important fact that the recent gap to the upside between 3344 and 3370 was tested successfully with a low of 3378 on Thursday followed with another gap and close in the green and on the highs of the day on Friday. In addition, the drop down to 3378 and close at 3469 shows up as a spike low on the weekly chart suggesting that the index will follow through strongly to the upside this coming week.

On a weekly closing basis, there is minor resistance at 3498 and at 3526. On a daily closing basis, there is minor resistance at 3488/3491 and at 3498/3502. On a weekly closing basis, support is minor at 3455 and decent at 3202/3206 and minor at 3161. On a daily closing basis, support is decent at 3401, minor at 3328, very minor at 3296 and minor to decent at 3200. Strong support is found at 3166.

The NASDAQ has continued to outperform the other 2 indexes and that is a bullish statement as the index represents the general market, meaning that overall investors continue to believe the uptrend will continue and that further upside of consequence is yet to be seen the rest of the year.

Nonetheless, there are a few negatives seen in the chart of the NASDAQ, starting with the fact the index now shows 3 successful intra-week retests of the 3531high and in spite of the strong rally on Friday, none of those previous highs were broken. In addition, the gap seen on Friday between 3424 and 3429 is not in a gap area, suggesting the gap will be closed this coming week at some point and if so, throwing a bucket of cold water on the momentum the bulls need to re-stimulate the uptrend.

To the upside, the NASDAQ shows intra-week resistance at 3482, 3503, 3514, and at 3531 that if broken could cause a domino-like effect to the upside. The resistances, with the exception of the one at 3531, are "all" minor and if the first one is broken would likely cause the rest to be broken as well. With the index having had a high of 3471 on Friday, after a rally of 42 points from the low of the day, it isn't going to be very difficult for the bulls to generate an additional 12 point rally on Monday and causing the domino's to start falling, especially since on the weekly chart the 3531 level has not yet been tested and for a retest to occur, the index would need to go above last week's high at 3482. Simply stated, the chart picture seems to suggest that if there is any follow through to the upside on the weekly chart that the index will plow through all the minor resistances and not find any selling until the previous high at 3531 is reached. In addition, such a scenario does not suggest that the resistance at 3531 would hold up either as the formation does not favor any kind of a double top being built. Simply stated, the chart looks bullish.

To the downside, the NASDAQ shows minor support at 3422 that if seen but holds up would close the gap generated on Friday and also give the bulls additional chart reasons to buy. Further support is found at the 3378 low seen this past week and at the 50-day MA, currently at 3355.

The bears in the NASDAQ are walking a very tight rope this week with most scenarios favoring the bulls. The weekly chart could sustain an intra-week rally up to 3500 that would work as a successful retest of the 3531 high if it fails thereafter. Nonetheless, such a rally would put the bulls in a very favorable position as the 13-year weekly closing high is 3498 and all the bulls would need to do is keep the index up at that level until Friday's close to generate a new weekly closing high and resumption of the uptrend. In addition, a rally up to 3500 would mean the recent 12-day downtrend on the intra-week daily chart would be broken and a failure signal would need to be given thereafter in order for the bears to regain control. This scenario is definitely a tight rope that offers too many chances for the bears to fail.

Nonetheless, the positive thing for the bears in the NASDAQ is that there is no better week for such a chart scenario to have a chance of success due to the fact that there are no scheduled economic reports to work as a monkey wrench. If the index follows this scenario to a tee (difficult to imagine it will), then the bears will have a chance of gaining control.

SPX Friday closing price - 1643

The SPX tested the support at 1598/1600 successfully this past week and closed on the highs of the week suggesting that further upside will be seen this coming week, above last week's high at 1646. On the weekly chart, the index has not yet tested the previous high at 1687 but that is now likely to happen this week as the index only needs to rally 4 points above Friday's close to put the index in a position that a successful retest of the high can occur.

The bulls in the SPX do have the edge right now as the 89 point drop seen over the past 3 weeks does fulfill the definition of a normal correction within a bull trend increasing the probabilities that new highs will be made. In addition, the all-time high weekly close is at 1667 and the bulls only need to rally the index an additional 23 points by Friday's close to generate a new all-time high. With the index having rallied 48 points on Friday alone, a rally of 23 points by Friday seems to be a high probability.

On a weekly closing basis, resistance is minor at 1667. On a daily closing basis, minor to decent resistance is found at 1660 and decent between 1667 and 1669. On a weekly closing basis, support is minor at minor at 1630, minor again at 1558, decent between 1553 and 1555, very minor at 1515, and minor to perhaps decent at 1500/1503. On a daily closing basis, support is decent at 1608, minor to perhaps decent between 1593 and 1597, minor again between 1552 and 1553 and strong between 1541 and 1545.

The SPX did generate a strong bounce on Friday after closing just slightly above the 50-day MA, currently at 1605, on Thursday. The bounce off of the 50-day MA was not a surprise as the index is in a clearly defined uptrend that has not yet been broken and the 50-day MA is a line that is considered a strong indicator of trend. In addition, the intra-week 1598 low seen this past week is not only a psychological support (1600) but also a level where 2 previous highs of importance at 1597 were seen previously, also suggesting that the drop down to that level is just a normal correction and not the beginning of the seasonal correction.

To the upside, the SPX does not show any resistance of consequence until the all-time high weekly close at 1667 is reached. Further intra-week resistance is found at 1674 and much stronger at 1687. The daily chart does suggest the rally on Friday will push the index to test intra-week the all-time high weekly close at 1667 this coming week. It also means that the SPX will need to lead the way for that to happen since the amount of rally needed in the index is far more that what is likely to be seen in the other indexes, if just a retest is what is coming. Evidently, any failure to accomplish the upside objectives might be seen as a negative.

To the downside, the SPX does not show any support of consequence until the 1598 low is reached. A break below 1597/1598 is likely to take the index down to the 1540 level where the next support base of consequence is found.

It is evident that the traders will be closely watching the action daily in the SPX this coming week because the index has a lot more to accomplish to the upside and the downside than the other indexes but whatever is seen is likely to be more indicative as no minor support or resistance levels are in play. Simply stated, a close above 1669 or below 1597 would be strongly indicative of what is to come.

The SPX chart is not giving any clear clues as to what to expect. The possible scenarios are clearly defined but the probability numbers are almost 50-50. With no economic reports of consequence due out this week, the traders will have to figure things out based on the charts alone and right now the charts are evenly split as to what can happen.

Everything the bears accomplished the past 3 weeks was erased on Friday with the strong rally that came after the Jobs report was released. The Jobs report was not actually all that bullish but the market is now trading mostly on speculation of what the Fed is likely to do rather than on the actual status of the economy and the ISM Index report on Monday and the still fragile Jobs Report on Friday do suggest the Fed will continue, and perhaps increase, their participation in Bond Purchases. The traders will have to make that determination this coming week but with no economic reports of consequence scheduled, they will likely depend much on what the charts tell them to do.

This coming week is seemingly turning out to be a pivotal week as chart-wise stocks and indexes are at levels of importance that are likely to generate follow through in the direction chosen. The probabilities slightly favor the bulls but there are negative fundamental factors still in play that need to be decided upon before the traders jump in "whole hog".

Monday could be the most pivotal day of the week with follow through to the upside expected to be seen. Nonetheless, the amount of follow through and then where the indexes close, will likely help the traders determine the approach for the rest of the week.