DOW Friday closing price - 18552

The DOW technically generated a negative reversal, having made a new all-time intra-week high at 18668 (above the previous week's high at 18638) and then closing in the red. Nonetheless, the negative reversal was not all that convincing given that the index did not break any previous support levels and closed just slightly in the lower half of the week's trading range, leaving the door open for resumption of the uptrend or simply a slight pause with a move below last week's low before the important economic reports come out the following week.

The DOW has now spent 6 weeks above the previous all-time high daily close at 18312 and above the all-time high weekly close at 18272, meaning that it is likely to need a negative fundamental catalyst to bring any significant selling interest.

To the upside and on an intra-week basis, the DOW shows very minor resistance at 18600 and at 18638 and minor to perhaps decent at the all-time high at 18668. Above that level, there is minor psychological resistance at 18700 and decent psychological resistance at 19000.

To the downside and on an intra-week basis, the DOW now shows minor but likely short-term pivotal support at 18468 and then minor to decent support at previous weeks low at 18247. Below that level there is psychological support at the 18000 demilitarized zone and then no support until the 17713 level is reached, which is now considered pivotal support. On a daily closing basis though, support is decent and now longer term pivotal at 18313.

The bulls are still in control in the DOW but the fact that the index has "only" gone above the previous month's high by 46 points in the 15 trading days of August, in spite of there being no chart obstacles above, is suggestive that the bulls may be running out of ammunition. If that is the case, this coming week will be short-term pivotal as a drop below last week's low at 18468, which is now a double low on the daily chart, would be a failure to follow through and a sign that the bears have gained the edge for the week. Nonetheless, the bulls attempted to break that support on Friday but failed and the index closed near the highs of the day, suggesting further upside above Friday's high at 18585 will be seen on Monday, If that does occur, the bears will lose whatever slight edge they may having gained last week.

Probabilities very slightly favor the bears in the DOW for this week, but the chances are almost 50-50.

SPX Friday closing price - 2183

The SPX also technically generated a negative reversal week but the weekly close was in the red by only 1 point and the index closed in the upper half of the week's trading range, suggesting that further upside above last week's high at 2193 will be seen this week, meaning that the probabilities of the reversal being evaluated as a negative are very low.

By the same token, the index has only been able to gain 18 points (.008%) over the past 23 trading days (4 weeks) suggesting that the buying interest is waning and that further upside will not be easy to achieve.

Nonetheless and in spite of the minimal gain seen the past 4 weeks, the SPX chart is still strongly positive, especially given the fact that the most recent breakout above the previous all-time high daily close at 2175 was tested successfully the previous week with a red close at 2175 followed by 7 higher closes. As such, the index shows good support that will likely require a fundamental catalyst to break.

To the upside and on an intra-week basis, the SPX shows very minor resistance at 2187 and minor last week's high at 2193. On a psychological basis though, the 2200 level (which has been an objective of many analysts this year) is likely to offer some resistance.

To the downside and on both an intra-week and daily closing basis, the SPX now shows minor but short-term pivotal support at 2175. Further minor to perhaps decent support is found at 2147. Below that level there is no support until minor to perhaps decent support is found at 2074.

The SPX rallied an additional 5.5% above the July highs in 2012 (the year the July-August swoon did not happen). By the same token, the index was still trading "below" the previous all-time high that was made in March of that year, meaning that when a new all-time high was made the third week of August, the index likely rallied strongly based on stop loss short-covering. As such, to obtain a possible upside objective this year, the percentage amount of rally above the previous all-time high seen in 2012 (3.8%) will be used. In 2012 the previous all-time high was 1419 and the high reached the second week of September was 1474, meaning that using the 3.8% that the index rallied and using the previous all-time high at 2134 seen last year, it would suggest the upside objective of this rally will be 2215.

The SPX bulls need to keep the uptrend moving forward, even if it is inches by inches. Having generated a successful retest 2 weeks ago of the breakout above 2175, a break below last week's low at 2168 in conjunction with a daily close below 2175 would be disappointing and likely generate some selling interest. As such, all the bulls need to do this week is go above 2193 and stay above 2168. Probabilities favor the bulls but for a very slight gain this week.

NASDAQ Friday closing price - 5238

The NASDAQ made yet another new all-time intra-week and weekly closing high, the second and third respectively, and closed slightly in the upper half of the week's trading range, suggesting further upside above last week's high at 5271 will be seen this week.

By the same token, the NASDAQ has now generated 8 green close weeks in a row and that has not happened since April 2010 (6 years) when 8 in a row occurred as well. The record for the past 16 years has been 9 in a row, seen in 2008 when the index had just bottomed out and the all-time record is 10 in a row in 1999 when the Dot.com era caused the index to rally precipitously. On that occasion, the index rose 33% in value before a red close occurred. The present rally has taken the index up 13.3% without any red close occurring.

To the upside and on an intra-week basis, the NASDAQ shows very minor resistance at last week's high at 25.71. Above that level there is no resistance at all, other than perhaps "general" at 5300 (300 points above an even level, such as 5000).

To the downside and on an intra-week basis, the NASDAQ shows short-term pivotal support at 5193/5197 and then a bit stronger at 5109. Nonetheless, on a daily and weekly closing basis, the previous all-time highs at 5218 and 5210 respectively, are pivotal as a close below those levels will generate a failure to follow through signal.

Based on what happened in 2012, the year that is most mimicking this year when the July-August swoon did not occur, the NASDAQ has potential to rally anywhere from an additional 2.8% to as much as 4.75% from its previous all-time intra-week high at 5231. This is all based on what it and the other indexes did that year. As such, potential upside objectives for a top to this rally (before the next September-October seasonal swoon occurs) could be anywhere from a low of 5367 to a high of 5475. It does need to be explained that these "possible" upside objectives could take as much as another 4 weeks to reach.

The NASDAQ remains the strongest but the most fragile of the indexes, having generated so many green weeks in a row but not having built any support on the way up. The 5193 level has now become important and pivotal short-term support that if broken could be seen as the first domino falling.

Probabilities in the NASDAQ continue to favor the bulls.

The bulls continue to be in control of the index market but the pace of appreciation remains limited. Nonetheless, there are no economic reports of any consequence scheduled until Thursday (Durable Goods and 2nd estimate of GDP), suggesting that unless something happens in Asia and/or Europe that the bulls will continue to be in control. Even then, it is unlikely that either of the scheduled reports will have any catalytic impact.

As such, the probabilities favor another week of slow appreciation as the traders wait for the strong economic reports (ISM Index and Jobs) that are due out the following week before considering any change of direction.