DOW Friday closing price - 18432

The DOW generated the first red weekly close in 5 weeks, suggesting that the buying spree that caused the new all-time high to be made 3 weeks ago has subsided or at least come to a pause. The index closed in the lower half of the week's trading range, suggesting further downside below last week's low at 18368 will be seen this week.

The red weekly close was disappointing to the bulls, given that the earnings reports on DOW stocks this past week (13 of them) were mostly better than expected but at no time was the index able to get above the previous week's high in spite of the fact that the index closed near the highs of the week the previous week.

It does need to be mentioned that the DOW is mimicking what happened in 2013 and 2014, having generated a red close and near the lows of the week (in the latter part of July) after new all-time highs and closes near or on the highs of the week occurred the week before. In both of those cases, a July to August swoon of anywhere from 4.8% to 5.2% occurred.

To the upside and on an intra-week basis, the DOW now shows minor resistance at 18542 and minor to decent at 18622. Above that level, general resistance is expected to be found at 18700.

To the downside and on an intra-week basis, the DOW shows no support 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 has now reported earnings on 25 of its 30 stocks, suggesting that earnings will no longer be considered a catalyst for the short-term. The ISM Index and Jobs reports are due out this week and they could change things but the reality is that neither of those reports have been catalytic of late, meaning that the traders are likely to start trading the index technically and perhaps seasonally (4 of the past 5 years the index has corrected in the July to August period) for the next few weeks.

The big key in the DOW this week will be the previous all-time high daily close at 18315 and weekly close at 18272. Closes below those levels would give a failure to follow through signal and suggest that the seasonal correction will occur. Any new high above the recent all-time high at 18622 would mean the seasonal correction will not occur and further upside would then likely ensue.

Probabilities slightly favor the bears.

SPX Friday closing price - 2173

The SPX made another new intra-week all-time high this past week, having gotten above the previous week's high at 2175. Nonetheless, the index did not produce a new all-time high weekly close, having generated a red weekly close on Friday, meaning that in spite of the new all-time intra-week high the door remains open for the seasonal July-August swoon that has occurred 4 of the past 5 years.

Nonetheless, the SPX closed near the highs of the week and further upside above last week's high at 2177 is expected to be seen, meaning that the chart action this past week is not yet fully supporting a seasonal correction as further upside, especially on a daily and weekly closing basis, would diminish the chances of the index having the 4.6% and 4.8% correction that was seen in 2013 and 2014.

To the upside and on an intra-week basis, the SPX show no resistance above as it is into new all-time highs. On a daily closing basis though, minor resistance is found at 2175. Above 2177, there is no resistance but many analysts had a 2200 objective for this year.

To the downside and on an intra-week basis, the SPX shows minor support at 2159 and at 2155. Below that level there is no support until minor to perhaps decent support at 2074. On a daily closing basis though, the previous all-time daily closing high at 2131 and previous all-time weekly closing high at 2126 will be considered support.

The SPX has spent 12 days in a row trading in a very narrow trading range between 2155 and 2177 with all daily closes being between 2161 to 2175. The action strongly suggests that the momentum to the upside has stalled. With no further earnings reports of consequence due out, if the ISM Index and Jobs reports do not further nurture the bulls, a correction to the overbought condition is likely to occur, as well as a retest of the previous all-time highs, especially since there is a seasonal correction period ahead.

It does seem that the key in the SPX this week will be a new daily closing high above 2175. A close above that level would suggest the seasonal correction will not occur, especially since any higher close would come in August.

Probabilities very slightly favor the bears.

NASDAQ Friday closing price - 5162

The NASDAQ made a new 8-month intra-week high and generated a new 54-week weekly closing high on Friday, having gone up to the 5176 high seen last November and closing above all but the all-time weekly closing high seen in July of last year at 5212. The index closed near the highs of the week and further upside above last week's high at 5175 is expected to be seen this week.

The NASDAQ was assisted this week by the earnings reports of 3 of the big 5 Tech companies (AAPL, AMZN, and GOOGL) that came in better than expected and that generated rallies of 5.4%, 1.9% and 4% (respectively) above the previous week's closes.

Nonetheless, the NASDAQ bulls were not able to break the November intra-week high at 5176 in spite of getting up to that level at mid-day on Friday (due to the reports on AMZN and GOOGL), having then languished below that level for the last 4 hours of trading and closing in the mid-point of the day's trading range, suggesting the selling interest there was strong. The question likely to be asked on Monday is "will the bulls be able to garner additional buying interest without any additional fundamental stimulus?"

To the upside and on an intra-week basis, the NASDAQ shows decent as well as short-term pivotal resistance at 5176. Above that level there is no intra-week resistance until the all-time high at 5234 is reached. On a daily closing basis, resistance is found at 5218 and on a weekly closing basis, resistance is found at 5210, both considered major.

To the downside and on an intra-week basis, the NASDAQ shows very 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. On a daily closing basis though, minor support will be found at the previous 52-week daily closing high at 5162, then minor to perhaps decent between 5133 and 5137 and then nothing until decent daily close support is found at 4923.

The bulls in the NASDAQ are now "committed" to making new all-time highs, especially since the other 2 indexes have already done it and more importantly the Tech Sector seems to have recovered with some stocks making new all-time highs already. The momentum is there to carry the index higher but with no support having been built on the way up (9 days in a row of higher lows than the previous day and 19 days in a row without any support of consequence having been built) the bulls can ill afford even a pause as any stoppage of the momentum would likely bring about a correction of consequence.

As such, if 5176 is not broken on Monday and the index drops below the 200 10-minute MA, currently at 5126 (which is a line that has not been broken to the downside for the past 20 days), the bulls will miss "a beat" and that would likely be the beginning of their downfall to the seasonal correction that normally starts the end of July. On a continuing possible negative note though, the NASDAQ continues to show 3 gaps to the upside over the past 4 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 2 weeks ago 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.

The NASDAQ got an unexpected push higher this past week when AAPL, AMZN, and GOOGL reported better than expected earnings. Now the bulls need to turn that good fortune into a new all-time high. Anything less would be a big disappointment. Probabilities favor the bulls this week.

The indexes gave mixed signals this past week, with the DOW closing lower, the SPX closing slightly lower (but considered unchanged) and the NASDAQ closing higher. The Tech industry seems to have gotten its "mojo" back with 3 of its most important companies (AAPL, AMZN, and GOOGL) reporting better than expected earnings and AMZN and GOOGL making new all-time weekly closing highs. With the Tech industry leading the way again, it can be surmised that the market is into a new leg upward.

This week, the market will receive the 2 most important economic reports of the month with the ISM Index on Monday and the Jobs report on Friday. Those reports may (and likely will) set up the market for what is to happen the next 4 weeks.

The July-August seasonal correction has occurred on 4 of the past 5 years but what will likely be decided this week is whether this year will be the 1 exception or the 4 that occurred. Mixed signals are being given in the Indexes as the DOW suggests that it will, the NASDAQ suggests that it won't and the SPX seems to be waiting to see which one is right.