DOW Friday closing price - 18570

The DOW continued its upward climb, having made a new all-time intra-week and weekly closing high on Friday and closing near the highs of the week, suggesting further upside above last week's high at 18622 will be seen this week.

The DOW did receive 10 earnings reports this past and will receive an additional 13 this coming week, meaning that the bulk of the earnings reports will be out by the end of the week. Nonetheless, in spite of the fact "all" reports this past week were better than expected, the index only rallied .3% (based on the weekly closes), suggesting that the buying interest has begun to wane a bit.

To the upside and on an intra-week basis, the DOW shows no resistance whatsoever as it is on a new all-time intra-week high. By the same token, the 18700 level is a "general" resistance and the 19000 has to be considered a decent psychological resistance.

To the downside and on an intra-week basis, the DOW shows minor support at the week's low seen Thursday at 18469. Below that level, no support is found until the 17713 level is reached. Nonetheless, on a daily closing basis, minor but likely pivotal support will be found at the previous all-time high daily close at 18315 and then at the 52-week daily closing high at 18100. On a weekly closing basis, support will be found at the previous all-time high weekly close at 18272.

The DOW generated a small trading week, having traded in a 153 point trading range, compared to the previous 3 weeks of 935, 453, and 396. The shrinking trading ranges do suggest that the buying interest at these new all-time highs is waning and that a correction back down to test the previous all-time high is likely to occur before further upside of consequence is seen.

The DOW generated a July-August swoon last year that started the 3rd week of July from 18137 and that ended the 3rd week of August at 15370. It was a swoon of 15.3%. The previous year (2014) the index found the top of the rally the 2nd week of July and dropped from 17151 to 16333 (a swoon of 4.8%) by the first week of August. That swoon was followed by a new high seen the 3rd week of September at 17350 and another swoon down to 15855 by the 3rd week of October, a swoon of 8.7%, In 2013, the index saw a high the last day of July at 15658 and a swoon down to 14760 by the last week of August, a drop of 5.2%. Last but not least, in 2011, the index got up to 12751 by the 3rd week of July and then proceeded to drop down to 10604 by the 3rd week of August, a swoon of 17%.

It should be mentioned that the swoons in 2013 (4.8%) and 2014 (5.2%) were all from new all-time highs, meaning that they are the ones most likely to be duplicated this time around. As such, a drop to somewhere between 17600 and 17700 should be expected, depending on the highs made this week. By the same token, it also needs to be mentioned that both of those swoons were followed by a new high in September and a lower low below the August low in October.

As such, the probabilities favor the DOW starting to head lower this week as this is the last week of July. Whether a new high is made above last week's high or not is yet to be seen but in 2013 and 2014, the index failed to get above the previous week's high by 3 points and by 18 points, suggesting that getting above last week's highs this week is not a given. In both those years, the index closed near or on the highs of the week the previous week to the swoon and the bulls failed to carry the index higher the following week.

SPX Friday closing price - 2175

The SPX made another new intra-week and weekly closing high this past week, having gone above the previous week's high by 6 points and closing above the previous week's high weekly close by 14 points. The index closed on the highs of the week and further upside above last week's high at 2175 is likely to be seen this week.

Nonetheless, all the earnings reports on the big Financial companies in the SPX are now out and even though the earnings on GS and MS (the last 2 biggies) came out much better than expected, the index only rallied .7% above the previous week's close, compared to 1.3% and 1.5% the previous 2 weeks, suggesting the buying interest is starting to wane.

The SPX shows the same history of a July-August swoon as the DOW has shown (see above) and the 2 years (2013 and 2014) that are most like the one being seen now, the index corrected 4.6% and 4.8%, suggesting that a drop down the 2070-2076 area is likely to be seen over the next 4 weeks, using last week's high as the basis for the correction.

To the upside and on an intra-week basis, the SPX show no resistance above as it is into new all-time highs. Nonetheless, many analysts had a 2200 objective for this year and with the index now being within 25 points of that objective (based on the high seen last week), it could be surmised that some selling interest will start to be seen here.

To the downside and on an intra-week basis, the SPX shows minor support at 2159 (Thursday's low) and at 2155 (a week ago Friday's low). Below that there is no support until minor to perhaps decent support at the most recent low at 2074 seen 2 weeks ago. Below that level, there is very minor support at 2063 and then minor to decent between 2050 and 2052. Decent support is found between 2039 and 2042.

The SPX though, is not likely to be the leader this week as it has been the last couple of weeks as the DOW and the NASDAQ will be reporting the bulk of their important earnings reports this coming week. In addition, if the index gets up to 2076 (1 point above last week's high) it will be reaching the 1000 point-above-the-previous-all-time-high and nearing the year's fundamental objective of 2000, it does suggest the traders will not be paying close attention to the index this week.

Probabilities favor the SPX getting above last week's high but it could be by as little as 1 point (up to 2176) and then turning around to generate a red close.

NASDAQ Friday closing price - 5099

The NASDAQ confirmed the break above the psychological resistance at 5000, having followed through to the upside with a new 8-month intra-week high as well as another green weekly close. The index closed on the highs of the week and further upside above last week's high at 5103 is expected to be seen this week.

NASDAQ will be receiving 3 important earnings reports this week, with AAPL reporting on Tuesday after the close and AMZN and GOOGL reporting on Thursday after the close, meaning that the traders will have a good idea of what to expect from the Tech sector the rest of the year. The Tech sector could be the main catalyst for further upside or for disappointment in the rally, given that is has led the market the past couple of years but having fallen in disfavor this year, the stocks in the index can be considered undervalued at this time, if and when earnings show the sector is returning to prominence.

On a possible negative note though, the NASDAQ now shows 3 gaps to the upside over the past 3 weeks (between 4692 and 4732, between 4889 and 4901 and between 4958 and 4976) and anything more than 2 gaps usually means that at the very least the last gap down at 4958 has become a magnet that at some point will draw the index back down. In addition, the Death Cross of the 50-week MA under the under the 100-week MA occurred this past week and the last time and the last time it happened was in 2008 and it brought about a 1208 point drop in the 7 months after the cross ensued.

In addition, the earnings reports this past week (NFLX, MSFT, INTC, and EBAY) were not all that helpful, given that they were mixed and with the exception of MSFT, none generated green after the reports came out. If the same applies this week with the big 3 (see above), it will be difficult for the bulls to generate further buying interest.

To the upside and on an intra-week basis, the NASDAQ now shows minor to decent as well as short-term pivotal resistance between 5116 and 5119 that is broken would likely cause the index to get up to the 5164/5176 level of decent resistance that if broken would suggest the all-time high at 5231 would be tested and "likely" broken as well. On a daily closing basis, the 5156 level is decent and pivotal resistance.

To the downside and on an intra-week basis, the NASDAQ now shows minor support at 5028 and minor again at 5002 but that is strengthened slightly with the psychological support at 5000. Below that level, there is minor to perhaps decent support at 4945, minor to decent at 4908 and decent at 4871.

The NASDAQ chart is not showing the kind of action that would suggest new all-time highs are on the immediate horizon. It is unlikely that the earnings reports this week will be so much better than anticipated, meaning that it is unlikely that the bulls will carry the index above resistance if the other indexes don't continue strongly to the upside (unlikely). As such, the chart does suggest that a sideways trend will continue at this time and that a drop down to the 50 and 100 week MA's, both currently at 4825 is likely to be seen if the July-August swoon occurs.

Probabilities favor the bears in the NASDAQ this week, at least as far as the weekly close next Friday is concerned.

Earnings reports came out better than expected on 88% of the reporting companies this past week but the bulls were not able to generate much further upside above the previous week's highs and many of those reporting companies actually closed in the red after the earnings reports came out, suggesting the rally is beginning to "run out of steam".

This coming week another large bulk of earnings reports will come out with the DOW having an additional 13 companies report, bringing the total to 25 of the 30 companies in the index. In addition, AAPL, AMZN and GOOGL will be reporting as well, meaning that the most of the important and possibly catalytic reports will be out. Given the response so far to earnings and the fact the indexes are now overbought, it does suggest the probabilities of direction are shifting back to the bears.

In addition, on 4 of the past 5 years there has been a July to August swoon occur, right after the first couple of weeks of earnings and given that the 2013 and 2014 swoons were also from new all-time highs, it does suggest the same will occur this week.