DOW Friday closing price - 16452

The DOW generated a positive reversal week, having gone below last week's low and then closing above last week's high. The index closed near the highs of the week, suggesting further upside above last week's high at 16505 will be seen this week. Nonetheless, it is important to mention that the index did not make a new all-time weekly closing high above the previous one at 16478, in spite of the fact that it did trade above that level intra-day on Friday, likely meaning the traders are not yet convinced the market is heading higher, especially considering that the leader of the indexes (NASDAQ) had a negative reversal week.

The DOW continues to be the laggard among the indexes since the bulls have not been able to make a new all-time high even though the other indexes accomplished their new highs 4 weeks ago. The fact that the bulls have failed not only to make a new all-time high but have had mostly open space to the upside up to 16520 for the last 2 weeks (since the resistance at 16174 was broken) and have not yet been able to even get up to that level does suggest that there is a strong reluctance by the bulls in being aggressive buyers in spite of aggressive buying being seen elsewhere. This fact is especially true when considering the index got positive fundamental help in the form of a better than expected ISM Index and Jobs reports.

On a weekly closing basis, there is decent to strong resistance at 16458/16478. On a daily closing basis, there is minor to perhaps decent resistance at 16481 and at 16530, and decent to strong resistance at 16576. On a weekly closing basis, support is minor to perhaps decent at 15698, minor at 15665, minor again at 15072 and decent to perhaps strong at 14799/14810. On a daily closing basis, there is minor support at 16027 and at 16040, minor again at 15821 and minor to decent at 15739.

To the upside, the DOW has resistance between 16505 and 16520 that is likely indicative and pivotal since it continues to be the second successful retest of the all-time high as well as an area where the index spent 4 trading days before deciding to go lower. Above that level, there is minor resistance at 16562 and then strong resistance at the all-time high at 16588.

To the downside, the DOW shows no previous intra-week support until 16240 is reached, which could be a pivotal area since it was the level that originally gave a sell signal on the daily chart 7 weeks ago. Further support is found at the low seen last Monday at 16071. A break of that level would open the door for the index to drop all the way down to 15703 since no previous intra-week support is found between those 2 levels.

The bulls in the DOW are committed to making new all-time highs and join the other indexes in making a clear statement for the rest of the year as nothing less can be allowed at this time after the negation of the sell signal and the new highs by the other indexes. By the same token, the bulls had plenty of opportunity to accomplish that feat this past week and they failed. If failure continues for another few days, especially after the Retail Sales report on Wednesday, it is likely that selling interest will increase.

The probabilities continue to favor the bulls as the weekly closing chart suggests the index will go above last week's high this coming week and a rally above 16505 will likely mean that the 16520 level of resistance will be broken, causing a domino-like reaction to the upside. Nonetheless, the index closed in the middle of Friday's trading range and if Friday's low at 16398 gets broken, it could start a chain reaction to the downside as the 16505 level would become the 3rd successful retest of the all-time high and after what has happened with the other indexes, it is unlikely the bulls would survive such a powerful chart sign without additional positive fundamental news, which is not scheduled to come out for another few weeks.

NASDAQ Friday closing price - 4336

The NASDAQ had a mixed week inasmuch as on a weekly closing basis the index had a positive reversal week having gone below and above the previous week's trading range and closing near the highs of the week, but on a daily closing basis the index had a negative reversal day on Friday, having made new 14-year weekly intra-week high but then going below Thursday's low and closing near the lows of the day and in the red. In addition, the index generated 3 out of 5 red closing days this past week, also suggesting that the momentum to the upside is stalling. The mixed signals still suggests that the bulls are in control as the weekly chart takes precedence over the daily chart, but it does suggest that the selling interest and volatility is increasing as the index goes higher.

The NASDAQ has no resistance above and with the close firmly above the 4300 level, a level that could have been considered as the last bastion of resistance until the 5000 level is reached, the probabilities continue to favor further upside. Nonetheless, the index generated the 5th green weekly close in a row and looking back on the chart 4 years the norm for any rally has been 4-5 green weekly closes before a red one appears, meaning that the probabilities suggest next Friday will be a red close.

On a weekly closing basis, decent to perhaps strong resistance is found at 4963 and major is found at the all-time high at 5048. On a daily closing basis, there is no resistance above for the past 12 months. On a weekly closing basis, support is minor at 4103 and decent at 4000. Below that level, there is minor support at 3919, and at 3791, and decent at 3589. On a daily closing basis, support is minor but indicative at 4277, minor at 4237, minor to perhaps decent at 4113, minor at 4051 and decent at 3996/3998.

The NASDAQ gapped up on Tuesday between 4284 and 4327 but the gap did not generated much further upside and on Friday the index began to drop into the gap with a low at 4319. With the index closing near the lows of the day on Friday, the first course of business for the week is likely to be to the downside with closure of the gap as the objective. Closure of the gap would not be considered a negative as gaps at this stage of the rally are not likely to stay open for long.

To the upside, the NASDAQ shows no resistance other than very minor resistance at the Thursday's and Friday's high at 4371. Above that level there is a vacuum of resistance until the 5000 level is reached.

To the downside, the NASDAQ shows support at the low seen last Monday at 4239 that if broken, and especially if a daily close below 4277 is achieved, would be a short-term sell signal. Nonetheless, no sell signal of consequence would occur unless the index closes below 4103 on a weekly closing basis, meaning that any weakness is likely to be limited and short-term.

The probabilities favor the NASDAQ generating some volatility this week, especially since volatility has been seen on 3 occasions during the past 6 trading days. With very little fundamental news scheduled to be released this week the traders are likely to be trading mostly technically, meaning that a pause in the uptrend, as well as fulfillment of the short-term chart, are likely to be the objectives. Closure of the gap down to 4284, and probably down to the daily close support at 4277, is likely to be seen this week as gaps are not positive in an overbought market that has not received fundamental news that would support new gaps being made.

The probabilities favor the NASDAQ having a trading range this week between 4277 and 4410. The close next week (red or green) is still iffy since the norm is 4-5 weeks of green closes before a red close but there have been 2 occasions in the past 4 years where the index generated more than 5 (once 6 and once 7 weeks in a row).

Expect volatility this coming week but no decisions being made.

SPX Friday closing price - 1878

The SPX continued making new all-time highs and having broken and closed above a minor upside target of 1876 the index is now prone to continue higher without any obstacles that could derail the rally. The index took over the leadership this week as it rallied 1.1% versus the DOW at .9% and the NASDAQ at .7%. The leadership of the indexes is not really all that important but with few stocks into new all-time highs, versus what the NASDAQ is showing with most of its important stocks into new all-time highs, it can be assumed that it could begin to catch up as the traders continue to shift into less overbought or overextended stocks.

The SPX closed very near its highs of the week and further upside above last week's high at 1883 is expected to be seen. With no previous or even general resistance above, the index is likely to reach the minor psychological resistance at 1900 this week. It should be mentioned that at this price the probabilities have now risen substantially that the 2000 psychological resistance (much stronger than 1900) is now the overall target.

On a weekly closing basis, there is no resistance above. On a daily closing basis, there is no resistance above. On a weekly closing basis, there is very minor support at 1831/1836 and then nothing until decent support between 1775 and 1782 is reached. On a daily closing basis, support is minor but likely indicative between 1845 and 1848, minor again between 1826 and 1828, and minor to decent at 1819. Below that level, there is minor support at 1805 and then decent support at 1775.

With no resistance above, the traders in the SPX are now going to be looking at failures rather than successes and the one level that has now gained pivotal status is the previous high daily close at 1848 and the previous high weekly close at 1842. A close(s) below that area would be a sign that a top (albeit perhaps only a temporary one) has been found.

The SPX is showing a possible bullish flag formation with the flagpole being the rally from Monday's low at 1834 to Friday's high at 1883. The flag would be the trading range between 1883 and 1870, suggesting that if 1883 is broken that the objective would be 1919. Nonetheless, the flag has not yet been fully constructed and the 1870 low can be broken without the flag getting negated, suggesting that some downside could be seen at the beginning of the week. Possible low of the flag (of the week) could be as low at 1859 without the flag getting negated, meaning that the objective would then come down from 1919 to 1900.

The SPX is now the strong index, at least from the point of view that no failure signals nor volatility to the downside have been seen yet, meaning that the traders may now follow this index for clues as to what is going to happen.

Probabilities favor further upside this week with a potential trading range of 1859 to 1897.

The indexes continue moving higher but this past week after the fundamental reports came out some short-term mixed signals were given, especially on Friday when the Jobs report came out better than expected but at least one of the indexes closed in the red. It is evident that the overall bias is still clearly to the upside but the possibilities of some short-term set-backs occurring have increased.

This coming week will be mostly technical in nature as the only important fundamental report comes out on Wednesday in the manner of Retail Sales. By the same token, Retail Sales reports tend to be volatile and therefore they are normally taken with a grain of salt, meaning that it is not likely it will have an impact on the market. The Russian problem is still hanging over the market but since most of it has already been dismissed, it is unlikely any meaningful flare-up will occur this week, suggesting the traders will not use it to generate any kind of direction.

The probabilities then suggest that "more of the same" will be seen with a slight increased chance that a bit more red will be seen that has been seen recently. By the same token, there are no indications yet that any kind of meaningful correction is about to start.