DOW Friday closing price - 15615

The DOW generated another new all-time high weekly close on Friday, as well as a close on the highs of the week, suggesting further upside will be seen this week. In addition, the bulls produced a positive reversal having gone below the previous week's low and then closing above the previous week's high also suggesting (technically and chart-wise) that new buying interest will be found this coming week as the action could be interpreted as a successful retest of the previous all-time high close seen in July at 15658.

It should be mentioned though, that the DOW has received nothing but good news on the economic front and with the earnings quarter now starting to wind down, the end of the year fast approaching, and the good economic news likely built into the price, the probabilities favor some profit taking starting to occur soon, especially since the next battle regarding the Debt Ceiling which will happen at the beginning of the year, fast approaches.

On a weekly closing basis, there is no resistance until psychological resistance is reached at 16000. On a daily closing basis, there is no resistance above. On a weekly closing basis, support is minor at 15072 and decent to perhaps strong at 14799/14810. On a daily closing basis, minor support is found at 15593 and at 15545, minor again between 15409 and 15413. Below that, minor support is found at 15168 and decent between 14960 and 14996.

The bulls were successful this past week in getting and closing the DOW convincingly above the general resistance that had stood up for the past 2 months at 15700 (300 points below the 16000 level). This means that there is little to stop the index from now getting up to the next psychological/general resistance at 16000.

On a negative note though, the DOW has built a 3-point channel line over the past 6 months, currently at 15850, that looms imposing as it started in May and has withstood 2 previous attempts to break it. With no economic or earnings reports of consequence due out this coming week, the bulls will have a tough time going above the line without some additional fundamental help. No economic reports of consequence are due out this week.

The DOW has been in a mostly sideways-with-a-slight-upward-bias trading range since May measuring between 900-1100 points. Rallies and drops (3 in each direction) have occurred over a period of 4-6 weeks before the trend turns back in the opposite direction. With index having moved up 1078 points in the last 5 weeks, the top of that trading range seems to be close-at-hand.

To the downside, the DOW has now built support over the past 11-trading days, both on a daily and intra-week basis, at the 15522-15545 level. If the general support that is usually found at the 15500 level is included, it can be said that area (15500-15545) has become an important short-term pivot point that if broken would likely signal a drop back down to the 15000 level, which now also includes the 200-day MA, currently at 14970. By the same token, there seems to be no fundamental catalyst on the immediate horizon that can trigger a selling or profit taking binge at this time.

There are no economic reports of consequence due out this week and with the bulls having won the battle this past week, it is likely that this coming week should be "more of the same" with a possible trading range between 15680 and 15850 being seen.

NASDAQ Friday closing price - 3919

The NASDAQ generated a second red weekly close in a row this past week, as well as closed the runaway gap between 3863 and 3882, suggesting that the selling interest has increased as the index has neared the 4000 level and that further upside above 4000 will be difficult to accomplish. By the same token, Thursday's spike down below the recent support at 3887 and close on the lows, followed by a reversal day on Friday and a close near the highs of the week, means there was no follow through to the break and further upside above the recent high at 3966 will be seen this coming week.

The NASDAQ is experiencing a decline in buying interest of its high flying tech stocks as lofty levels have been reached that do not support further upside of consequence. Traders have been trying to keep the general market rally going forward by shifting their buying interest to stocks that have seen some correction recently. It's the old adage of "Buy low and sell High", at its best.

On a weekly closing basis, minor resistance is found at 4069 and decent to perhaps strong resistance is found between 4234 and 4252. On a daily closing basis, there is very minor resistance at 3929 and minor at 3952. Above that level, there is no resistance for the past 12 months. On a weekly closing basis, support is very minor at 3791 and then nothing until very minor support is found at 3689. Below that, decent support is found at 3589. On a daily closing basis, support is minor at 3907and minor to perhaps decent at 3857. Below that, there is minor support at 3804 and at 3789. Decent to perhaps strong support is now found at 3677.

The closure of the runaway gap in the NASDAQ at 3863 (dropped down this past week to 3855), does suggest that the bulls have lost a step and that further upside of "consequence" at this time is not likely be accomplished. In addition, the breakaway gap at 3702 will now become a magnet giving the bears a definite target to shoot for on any correction that begins.

Nonetheless, on a positive note, the bulls were able to close the index in the upper half of the week's trading range and seeing what happened during the last spike down seen the second week of October when the bulls were able to rally to also close the index near the highs of the week and then rally 312 points in just 3 weeks, it is likely they have the same thought in mind on doing it now. With last week's low at 3855, it could mean the index will rally up to the mid 4100's over the next couple of weeks.

To the upside, it is highly likely that at least the previous intra-week high at 3989 from the year 2000 will be seen this coming week. Further resistance will be found at the top of the demilitarized zone at 4030 and then nothing until the 4192 level is reached. Stronger and much harder resistance to break will be found between 4259 and 4303. To the downside, this past week's low at 3855 is now decent and likely pivotal support. Some support is found at the 3800 level, which does include the 50-day MA, and then nothing until the 3734-3745 level is reached.

This coming week the NASDAQ is likely to trade between 3887 and 3989. Having closed on Friday at 3919, it does mean the index will see some red during the week but will also go above the recent high at 3966 and be up as much as 70 points at some point during the week.

SPX Friday closing price - 1770

The SPX made yet another new all-time weekly closing high on Friday, the 4th in a row, as well as a close on the highs of the week suggesting that further upside will continue. This is especially true since the index did test successfully the top of the channel, currently at 1750, that it broke above 4 weeks ago, meaning that not even a minor failure signal was given thus leaving a wide open door chart-wise for the index to reach the 1800/1805 objective that many analysts have stated will be reached this year.

The SPX has presently rallied 129 points without any kind of correction or pullback being seen and the previous 2 rallies seen this past year were 102 points and 149 points, meaning the index is now in an area where the traders will be thinking more about taking profits than putting on new long positions. By the same token, having closed on the highs of the week and further upside expected, it also likely means the bulls will be shooting to take the index up the same amount as the last rally, which was 149 points.

On a weekly closing basis, there is no resistance above. On a daily closing basis, there is minor resistance at 1771. On a weekly closing basis, there is minor support at 1690 and minor again at 1667. Below that level, minor to decent resistance is found at 1632 and decent at 1592. On a daily closing basis, support is minor to decent at 1747, minor at 1725, minor to perhaps decent at 1698/1700. Below that, there is decent/copious support between 1676 and 1685.

The last rally in the SPX seen in June is eerily similar to the once being seen now. The index then rallied over a period of 20 days before encountering any new selling and ultimately ended up with a 149 point rally from low to high before any correction was seen. The index has now rallied for 24 days and has seen 129 points so far since the low at 1646 was made. If past history is to be repeated, it would mean the high of the rally will likely be seen this week.

Several analysts have recently stated that the SPX is likely to get up to the 1800 level before any correction occurs and with 1800 also now being a psychological magnet the probabilities do favor it happening. In addition, the index did break out of a 3-point channel line 2 weeks ago that would also suggest a fast run-up to 1800 will occur. By the same token, the 3 point channel line that is now at 1750 is considered a support pivot point that if broken would probably bring in selling.

To the downside, the SPX has no support as the rally from the 1646 low has been mostly straight up. There is minor to perhaps decent support now at 1746, as well as minor support at 1740 that if broken would likely take the index immediately down to the 1700 level, if not down to 1676 where minor intra-week support is found, as well as the 100-day MA.

Having broken above the channel line mentioned above, the bulls are committed to taking the SPX up to the 1800 level. Any deviance from that with a break below 1750 and more importantly below 1740 would be a strong signal that a top to this rally has been found.

All the economic reports this past week (GDP and Jobs) were better than expected and the traders reacted accordingly with higher numbers being seen at the end of the week. The bears did have a chance this past week to make a chart statement as weakness was seen after the GDP report came out on Thursday, but no follow through was seen on Friday, meaning that insult was added to injury.

No economic reports of consequence are due out this coming week and that likely means that the bears will have no ammunition with which to stop the rally at this time. The bears are now going to have to depend on some end-of-the-year profit taking, as well as the approaching Debt Ceiling issue in January, for selling to be seen. Nonetheless, there is no immediacy involved as far as the time frame is concerned, meaning that it is not something they can depend on to occur this coming week. Probabilities favor further upside, though limited in nature due to the high risk factor and low profit potential for the bulls at these prices.