DOW Friday closing price - 17137

The DOW made a new all-time intra-week and weekly closing high on Friday, meaning the index has finally joined the other indexes in resuming the uptrend. Resumption of the uptrend had been in doubt after many failed attempts to make a new high had been seen over the past few weeks and even more in doubt when the index had a negative reversal day on Thursday. Nonetheless, a negative Jobs report and a peace agreement between Russia and the Ukraine were the key ingredients on Friday that put the index into new all-time highs.

By the same token, the fact the DOW kept pace with the NASDAQ this past week might end up being a small indicator that the traders are starting to hedge their bets thinking that a top may be on the horizon. Anytime that money favors the Blue Chip stocks it does suggest there is hesitancy among bulls.

To the upside, the DOW shows no resistance above. To the downside, the DOW now shows pivotal support, both intra-week and on a daily closing basis at the 17000 demilitarized zone. On a weekly closing basis though, support is not as pivotal but is found at 16943. Further but minor weekly close support is found at 16775 and then important and pivotal weekly close support at 16493.

After the action seen on Friday, the DOW should continue higher at the beginning of the week with the "general" resistance at 17300 as the objective. Nonetheless, the index is now showing a triple bottom on the daily chart with lows at 17118 on the 28th, 17009 on the 2nd, and 17009 on Thursday the 4th. That triple bottom is a magnet that will draw the traders to it, especially the higher the index gets.

For the time being though, there aren't any economic reports scheduled that could derail the DOW from going higher. The index is not likely to correct until such a time that the momentum to the upside has ended and with the new all-time high made on Friday, the probabilities favor the upside momentum continuing at this time.

NASDAQ Friday closing price - 4582

The NASDAQ made another new 14-year high this past week and closed on the highs of the week, suggesting further upside above last week's high at 4583 is likely to be seen. In addition, the index ended up having a positive reversal, inasmuch as the index went below the previous week's low at 4546 as well as above the previous week's high at 4580 and then closed in the green, suggesting that the index could accelerate to the upside this week.

On a possible negative note though, the NASDAQ was not the leader this past week and if the Tech sector starts to pull back, it will be extremely difficult for the market to continue higher.

It should be mentioned that September has generally been the beginning of an end-of-the-year rally in the NASDAQ with the index generating strong movement to the upside the last 4 months of the year, at least when the overall trend of the index has been up. Nonetheless, there have been 2 occasions in the past 7 years when the trend was up but the index topped out in September or October. In 2007, the index made a new 7-year high in October and then proceeded to get into a 17-month downtrend that took the index down 56% in value from 2861 to 1265 and in 2012 the index made a new 12-year high in September but then got into a short-term correction that lasted 2 months and took the index down 12% from 3196 to 2810. Though it is difficult to measure at this time the probability numbers for such an occurrence and which of the 2 occurrences would likely happen, I would venture to say the 2012 correction is the most probable. I can see the index moving up in September to the all-time high monthly close at 4696 and finding decent selling at that price and then correcting 12-15% in value and down to what is now considered decent to strong support around the 4000 level. This would mimic the 2012 event where the index corrected 12% but ultimately took the index to new highs. If that were to happen this time, it would suggest the all-time high at 5132 would be tested around the beginning of next year.

To the upside and on a weekly closing basis, the NASDAQ shows no resistance until 4963 is reached. The all-time high weekly close is at 5048. On a monthly closing basis though, the all-time high monthly close is at 4696. To the downside, the NASDAQ will show minor but now likely pivotal intra-week support at 4542/4546 and then a bit stronger at the previous all-time intra-week, daily closing and weekly closing high at 4485.

The NASDAQ is likely to continue to outpace the other indexes as it has a clear objective where the others don't. Nonetheless, it is also in a position that any kind of failure will be magnified to a high degree. The 4485 level, especially on a closing basis, is now likely an important pivot point that if broken would bring in new selling. By the same token, the 4696 level beckons with much allure as it is represents a return of the index to the glory days of the Dot.Com era back in the year 2000. The Tech industry is once again "the" driving force with companies such a AAPL leading the way.

This week is likely to bring further upside with little downside seen. The major reports for the month came out last week and though one of the reports was negative, the NASDAQ still responded positively. With no reports of any consequence until Friday's Retail Sales, it is unlikely the bears will come out of hibernation.

SPX Friday closing price - 2007

The SPX made another new all-time high intra-week and weekly close on Friday, extending the recent rally and also confirming the break above the 2000 level. The index closed on the highs of the week and further upside above last week's high of 2011 is expected to be seen.

There have been 4 occasions in the past, back in the year 2000 and in 2007, where the SPX got up to a psychological resistance level such as 1500 was considered to be and failed to make much of an inroad above that level having gone up to 1552 in the year 2000 and up to 1576 in the year 2007. The monthly closes in 2000 were 1498 and 5 months later at 1517 and in 2007 at 1530 and 1549. On all occasions the index first got up to the level and then corrected about 12% in value and after the second rally 5 months later the index got into a downtrend. This scenario does suggest the index will get above the 2000 level by at least 30-50 points but that further upside is unlikely to be seen thereafter.

With the SPX having generated a 2007 monthly close on Friday and having seen a positive reversal month with lower lows than the previous month and a close above the previous month's high, the probabilities favor the index closing higher in September. Then again, in looking at the past numbers and the 3 previous monthly closes above the psychological resistance, it would suggest that the index will close in September no higher than 12-46 points, meaning between 2017 and 2049, which is less than 2% higher than where the index closed on Friday.

The past charts further support the idea that the SPX will make a new high in September but then likely correct down to around the 1800 level by November and then go ahead and make yet another new high by February of next year.

To the upside, the SPX shows no resistance whatsoever, though some psychological resistance is likely to be seen at the top of the 2000 demilitarized zone at 2030. To the downside, the SPX will now show support between 1984 and 1990 that on a daily closing basis should not be broken or failure signals will start to be given.

The uptrend seems to have fully resumed as the indexes closed on the highs of the month and further upside it likely to be seen for most of the month of September. The "sell in May and go away" adage is now past history as the Fed support, as well as improving economic conditions, prevented that seasonal event from occurring this year. The question that will now be asked is whether the seasonal tendency to rally during the last quarter of the year will occur or whether the exception seen twice over the past 7 years where the index makes a high in September or October and then corrects or begins a downtrend will be seen this year.

There is only 1 important economic report this week in the way of Retail Sales next Friday. By the same token, economic reports have generally been better than expected and even when they haven't, the traders seems to be ignoring them, such as the negative Jobs report on Friday, likely meaning that the Retail Sales report this week will not have a negative impact unless way out-of-line to the downside.

All signs point to September being a positive month as all the negative seasonal tendencies have been ignored this year. Upside objectives as mentioned above will likely drive the indexes this month.