DOW Friday closing price - 17823

The DOW generated an inside week and a red weekly close but the index did close in the upper half of the week's trading range, suggesting further upside above last week's high at 17868 will be seen this week. In addition, with the other indexes all generating green weekly closes, it is evident that last week's red close was meaningless.

The DOW is facing a short-term pivotal week, both fundamentally and chart-wise, given that the 2 most important economic reports for the month (ISM Index and Jobs) are scheduled for this week and that any additional upside above 18133, especially a weekly close next Friday above 18132 (all-time high weekly close), would be a bullish statement.

To the upside, and on an intra-week basis, the DOW will show resistance at 17991 and at 18103. Above that levels, there is resistance at 18133, at 18288, and at the all-time high at 18351. Based on what happened last year, a break above 18133 would likely trigger further upside but a failure would likely trigger the same kind of down movement as seen last year.

To the downside and on an intra-week basis, the DOW shows minor support at 17667 and decent as well as pivotal support at 17579 that includes the 200-day MA, currently at 17590. Below that level there is no support until last week's low at 17210 is reached.

The DOW is showing some important levels to watch to the upside this week, starting with the monthly close on Monday. A close above 17823 on Monday (30 points above Friday's close) would start to give the bulls an additional edge on the charts as that was the close seen in November of last year and from which a drop down to 17037 occurred. A close above that level would suggest further upside, while a close at or below that level would suggest last year's action could be seen.

On a weekly closing basis, there is short-term indicative resistance at 17977 that is likely to be seen at some point this week, especially if the economic reports are not evaluated as being bearish enough to prevent the Fed from raising interest rates in December. A weekly close next Friday above the 18053/18086 level would be a bullish event, while a close next Friday above 18132 would likely mean the uptrend is resuming.

By the same token, the traders in the DOW will also be looking at an intra-week break of 17683 or a weekly close below 17713 as indicators that last year's "flash" sell-off in December down to 17037 might occur again.

The probabilities continue to favor the bears in the DOW, given that the probabilities support the Fed raising interest rates in December and under that scenario, it would be difficult at this time for the bulls to stage any kind of resumption of the uptrend.

NASDAQ Friday closing price - 5127

The NASDAQ generated a green weekly close on Friday and on the highs of the week, suggesting further upside above last week's high at 5134 will be seen this week. Nonetheless, the index is now at levels of decent to perhaps even strong resistance, suggesting that further upside, at least on a monthly or weekly closing basis, will be difficult to achieve without some clarification as to what the Fed will do in December.

The NASDAQ will continue to depend on its core stocks, such as AMZN, NFLX, GOOG, PCLN and AAPL for higher prices and it is interesting to note that GOOG generated a negative reversal week, AAPL has been trading at an important pivotal resistance point that it has been unable to break through on a weekly closing basis for the past 6 weeks, NFLX is "at" its critical resistance area but not yet above it, PCLN is on a short-term downtrend, and AMZN is the only stock that continues its uptrend but then only closed .08% above the previous week's all-time high weekly close, suggesting that some tiredness is being seen. As a group though, the charts seem to favor the downside by a "tad", meaning that the index may do the same this week.

To the upside and on an intra-week basis, the NASDAQ will show decent resistance at 5163/5164 and strong at the all-time high at 5231. Nonetheless, on a daily and especially a weekly closing basis, any close above 5147 would be a positive that would suggest the bulls will be successful in carrying the index to new all-time highs.

To the downside and on an intra-week basis, the NASDAQ shows minor but short-term pivotal support at 5050. Below that level the 5000 demilitarize zone will be decent support, especially at the bottom of the demilitarized zone at 4970, as a break of that level on a daily closing basis would also be a break of the 200-day MA. Decent and certainly longer term pivotal support is found at 4908 that if broken would definitely give a decided edge to the bears.

Monday could be an important day for the NASDAQ, given that the all-time high monthly close is at 5142 (seen last month) and the previous one seen in July was at 5105, meaning that a close on Monday above 5142 would suggest the index will continue higher in December, while a close below 5105 would be a failure signal. With the index closing on Friday at 5127, both levels are reachable on Monday.

It is evident that the NASDAQ is facing an important chart week, especially considering the important economic reports due out this week. Nonetheless, right across the board (daily, weekly and monthly charts) the probabilities favor the bulls, even if in December a flash drop in price is seen if the Fed raises interest rates. By the same token, the 4908 level is becoming an important longer term support that if broken would likely turn the charts around.

SPX Friday closing price - 2090

The SPX had an uneventful week, having closed 1 point above the previous week's close. The index closed near the highs of the week and further upside above last week's high at 2095 is expected to be seen. Nonetheless, it should be mentioned that the 2095-2097 area has become a difficult resistance level, having had highs of 2096, of 2097 and of 2095 the past 3 weeks, likely meaning the traders will be waiting to see the economic reports before further upside above that level can be considered.

It should also be mentioned that the SPX had the smallest weekly trading range (25 points) since May of last year and the last 2 times that the weekly trading range was lower, the following week the index generated a down move, meaning that the resistance area and the past 9-month history is working against the bulls.

To the upside and on an intra-week, the SPX shows minor to perhaps decent resistance at 2097, minor at 2102 and then nothing until minor to decent resistance is found between 2112 and 2114. Above that level, decent and likely pivotal resistance is found at recent high between 2116 and 2119. Above that level, strong resistance is found at the all-time double top at 2134/2132.

To the downside and on an intra-week basis, the SPX shows minor support at 2079, minor to perhaps decent between 2068 and 2070, that includes the 200-day MA, currently at 2065, minor again at 2058 and decent between 2039 and 2044. Below that level, now decent support is found at 2019.

The SPX is likely to be the most affected index if the Fed raises interest rates. It is not yet clear how it will be affected as higher interest rates could increase profitability for the financial industry but it is likely the index will show the most movement when that event occurs. As such, this week's economic reports will likely give the edge to either the bulls or the bears.

It should be mentioned that the SPX is also somewhat mimicking what happened last December when the index dropped 107 points (from 2079 to 1972) and this time dropped 97 points (from 2116 to 2019). The only difference being that last year the index was trading lower in price when the flash correction occurred than the 2116 level from which the correction occurred this time. By the same token, last year the index got back up to the previous high just 4 days after the low was made, whereas the index has now rallied 10 days from the low and still finds itself 27 points from the previous high, suggesting that the mimicking is not going as well for the bulls as it did last year.

On a bullish note though, the SPX chart is now showing a bullish flag formation with the flagpole being the rally from 2019 to 2097 and the flag being the trading range seen the last 6 days between 2097 and 2070. A break above the top of the flag at 2097 would give an objective of 2148, making the week even more important, especially given that the top of the flag is only 7 points higher than the close on Friday.

Probabilities favor the SPX trading between 2070 and 2097 for the first few days of the week but then on Friday when the Jobs report comes out, it is likely the traders will decide on a short-term direction. The chart favors the bulls but with important fundamental information due out this week, the charts are likely to take a back seat to the fundamentals.

The traders will be receiving important fundamental information this week, in the form of the ISM Index on Tuesday and the Jobs report on Friday. These 2 reports are likely to help the Fed decide what to do at the rate decision meeting on December 16th. Unfortunately, the reports may not be of great assistance to the traders as better than expected reports will likely increase the probability of a rate increase (which in turn would be a negative), while worse than expected reports (especially the ISM Index if under 50) would suggest the economy is slowing down, which would not be conducive to higher prices either.

In addition, December is not known to be a decisive month for the indexes, meaning that it is unlikely that anything of "great consequence" will occur either way (interest rate hike or not). As such, the play for the traders will be mostly short-term in nature.