DOW Friday closing price - 16583

The DOW made another new all-time weekly closing high on Friday, having closed in the green and above the previous week's close at 16512. By the same token, the bulls were unable to get above the all-time intra-week high at 16631 made 7 weeks ago for the second week in a row, having gotten up to 16622 this past week and 16620 the previous week, meaning that the bulls do not yet have the necessary buying support to resume the uptrend.

On a strong positive note for the bulls though, the DOW did close near the highs of the week and further upside above last week's high is expected to be seen. In addition, the index now shows 3 weekly highs in the same area over the past 7 weeks (16631, 16620, 16622), and a multiple-high scenario does suggesting the probabilities are elevated that a new all-time high will be made this week.

On a weekly closing basis, there is no resistance above. On a daily closing basis, is, there is no resistance above. On a weekly closing basis, support is very minor at 16361 and then none until decent support is found between 16026 and 16065. Below that, there is minor to perhaps decent support at 15698 and minor at 15665. On a daily closing basis, there is minor support at 16401 and again at 16361, minor to perhaps decent between 16245 and 16264 and decent between 16026 and 16065. Below that, there is minor support at 15821, minor to decent at 15739 and strong at 15372.

As of late, the DOW has been leading the market to the upside due to the fact the long-term trend continues to be positive but uncertainty remains as to how much farther stock prices can rally. As such, buying interest is keyed on Blue Chip Stocks that by nature offer more security than other stocks. If and when the index still goes up but is no longer the leader, the probabilities will favor strong upside in the overall market.

To the upside, the DOW only shows intra-week resistance at 16631. It does seem that a new intra-week high will be made this week unless some negative information comes out. Further resistance can be expected to be general and/or psychological in nature with 16700 and 17000 coming to mind. To the downside, the 16357 level is now indicative intra-week support, though on a daily closing basis the index would need to close below 16401 to make any kind of an indicative statement. By the same token, in looking at the weekly chart, the index would likely have to get below 16312 on an intra-week basis for the bears to get a bit more aggressive.

There is only one economic report of consequence due out this week (Retail Sales on Tuesday) and it is already anticipated to come in lower than last month's 1.2% number (expected to be .3%), meaning that the probabilities favor the bulls being successful in generating higher prices unless there is a strong negative surprise to the number. Even then, traders have been generally ignoring negative reports as Fed support is always expected if the economy shows any desire to falter.

With economic reports not having much impact, the DOW is likely to follow technical factors and/or world-wide events such as the present Russia/Ukraine situation, meaning that on a chart basis the triple top on the intra-week chart, the lack of any kind of chart reason for 16631 to be considered a likely resistance level, and the inability of the bears to make their presence known recently does suggest that at the very least the index will get up to the general resistance at the 16700 level.

NASDAQ Friday closing price - 4071

The NASDAQ continues to be the recipient of all the selling interest in the market as the tech sector that rallied the most the last couple of years and is/was considered the most overpriced is where all the profit taking has been seen as of late. The index was unable to follow through on the previous week's close in the green and near the highs of the week, suggesting that the buying interest is still not strong enough to generate further upside. By the same token, the index ended up having an uneventful inside week which also suggests that the profit taking is starting to fade and that the index may rally if for no other reason than the 14-year high at 4371 has not yet been tested successfully. It is always unlikely that a trend will turn around and go the other way without a successful retest of the high or some fundamental change of consequence.

The NASDAQ did close slightly in the lower half of the week's trading range and a drop below last week's low at 4021 is likely to be seen this week. By the same token, unless the recent low at 3946 is broken, which also represents a successful retest of the 200-day MA, it is highly unlikely that new selling of consequence will be seen, especially since several of its main stocks (AMZN, GOOG, NFLX, and PCLN) have reached levels of support that are unlikely to get broken without some retracement to the upside occurring first. A drop below 4021 without breaking 3946, followed by a rally the following week above next week's high, would strongly suggest that on a short-term basis the index would stage a fast rally to test the 4371 high.

On a weekly closing basis, resistance is minor at 4123, minor to perhaps decent at 4197, very minor at 4276 and decent at 4336. On a daily closing basis, resistance is minor but likely indicative at 4138, minor again at 4161, minor to perhaps decent at 4183 and decent at 4243. Above that level, there is minor to decent resistance at 4273 and at 4333 and strong at 4357. On a weekly closing basis, support is decent at 3999/4000 and minor to perhaps decent at 3919. Below that, there is minor support at 3791 and decent at 3589. On a daily closing basis, support is minor at 4051 and decent to perhaps strong between 3996 and 3999.

The NASDAQ has been on a clearly defined short-term downtrend for the past 2 months with 5 lower-than-the-previous-high retests (4344, 4285, 4185, 4177, and 4149) of the 14-year intra-week high at 4371. By the same token, for the last 4 weeks since the index tested the 200-day MA successfully when it dropped to 3946, the index has twice successfully tested that low with drops down to 4014 and 4021. It should be mentioned that if the index goes above Friday's high at 4071 on Monday, a third successful retest of the recent low will have occurred with Friday's low at 4025. With 5 successful retests of the high and 2 (likely 3) successful retests of the recent low, it can be said that "something strong is likely to happen soon as that shrinking chart pattern cannot be maintained for long.

I continue to believe the probabilities favor the bulls since the longer term trend on the weekly chart remains to the upside (no sell signal given on that chart yet). The NASDAQ would literally have to generate a weekly close below 3999 for any kind of a sell signal to be given and that has not yet occurred. In addition, the Eliot Wave theory does suggest that the 5th wave is usually the last one and the index now shows 5 waves down on the daily chart, suggesting that some resolution is likely to be seen as soon as this coming week and that it will probably be to the upside.

The recent shrinking chart pattern (lower highs and higher lows) in the NASDAQ suggests something of consequence is likely to occur very soon. Nonetheless, the shrinking pattern is likely more indicative to the upside than the downside because of the 200-day MA, currently at 3990, will offer support even if the most recent intra-week lows at 4021 and at 4014 are broken. On the other hand, a rally above the most recent intra-week high at 4149 would break a 2-month downtrend and with the longer term trend being still up, it would likely stimulate a rash of new buying among those important stocks that have already corrected strongly and cause a sharp and fast rally to occur.

It is difficult to say with any degree of certainty exactly what "short-term gyrations" the NASDAQ will take this week but the probabilities continue to favor the bulls as long as no new fundamental negatives come out. On the other hand, if the 200-day MA and the recent low at 3946 get broken, the bears will need a "ton of help" to get out of that hole.

SPX Friday closing price - 1878

The SPX was mostly a watcher and not a participant this past week. The index had an inside week and though the expeted follow through to the upside was not seen after last week's new all-time high weekly close and close near the highs of the week, the bears were also unable to make any kind of a bearish statement either, meaning that the traders are likely awaiting more information before making any further decisions.

The SPX did close near the highs of last week and further upside above last week's high at 1889 is likely to be seen. The index generally follows the DOW and it is expected that index will make a new all-time intra-week high this week or next at the latest, suggesting the SPX will do the same and get above its all-time high at 1897.

On a weekly closing basis, there is minor resistance at 1881. On a daily closing basis, there is minor resistance at 1884 and decent to strong at 1890. On a weekly closing basis, there is minor support at 1841, decent at 1815, minor at 1805 and decent at 1775/1782. On a daily closing basis, there is minor support at 1867 and again at 1863, decent between 1841 and 1849 and decent again at 1815. Below that, there is very minor support at 1809, minor to perhaps decent at 1780 and decent to perhaps strong at 1741.

The SPX has traded mostly sideways for the past 15 trading days between the previous all-time intra-week low at 1850 and the recent intra-week high at 1891. The index has not given any clues as to what direction will be seen from here but the index previously traded sideways for 19 trading before the bulls were able to generate a new all-time high and that likely means that sometime this week a decision will be made, and based on the previous action seen it will likely be to the upside.

If the SPX generates a break above 1891 it is likely the all-time high at 1897 will be broken as well and a rally up to the top of an uptrend channel at 1915/1920 will be seen. If the index breaks below 1850, it is likely the index will test the recent low at 1814 and if that level is broken, a drop down to the 200-day MA, currently at 1783, will probably be seen.

All chart indications are that the SPX will move higher this week or at the latest the following week. Last week's high and low at 1889 and at 1859 respectively will likely determine which week the new high will be made.

With the DOW saying higher and the NASDAQ saying lower, it is clear that mixed signals are being given at this time. Nonetheless, neither index was totally convincing this past week, meaning that uncertainty remains in place. Support from the Fed continues to keep the traders from being aggressive to the downside in spite of the seasonal tendency for the market to start a correction in May, but then again the Fed support is not enough at this time to generate new buying of consequence as seen before. Stocks are being hand-picked for profit taking and/or rallies but there is no clear consensus of opinion, meaning the overall market idles more than moves.

Retail Sales comes out this week on Tuesday and it is a "B+" kind of report but based on the inability of the traders to accomplish much after all the big reports came out 2 weeks ago, it is unlikely that it will have much impact. The Russia/Ukraine situation continues to be a possible "monkey wrench" but it too is unlikely to be resolved either way this week, likely meaning that the market will remain with a slight bullish bias but not likely to do anything strong.

By the same token, the amount of time spent trading sideways does suggest that something of consequence is about to happen, especially since there are 2 factors that will likely need to get resolved soon and that is 1) the seasonal tendency for the traders to "sell in May and go away" and 2) the fact the NASDAQ has not yet tested the recent 14-year high on the weekly chart. One of these, if not both, is likely to start getting resolved this week as time is running out.