DOW Friday closing price - 17675

The DOW generated a red weekly close on Friday, meaning that the index has now confirmed that the uptrend that started in February with a weekly closing low at 15973 has now turned into a 500 point sideways trend between 17515 and 18003, much like what was seen last year between February and July and between 17712 and 18272. Nonetheless, the index seems to be in a fundamental pause (rather than a sideways trend) as the traders await the Brexit vote/decision on Thursday of this week.

The DOW closed in the middle of the week's trading range, leaving the door open for both directions depending on the results of the Brexit vote. With the index having generated a 422 point trading range and what could end up being a spike low retest of the 14-week low at 17331 (seen in May), the chart could be "set up" for another attempt at the recent high at 18016 should the English decide to stay in the Euro. By the same token, a vote to leave the Euro would likely mean last week's low would be the beginning of a new downtrend with a minimum objective of 17000 and a possible retest of the 200-week MA, currently at 16250.

To the upside and on an intra-week basis, the DOW will show minor resistance at 17762, very minor at 17811, and minor to perhaps decent between 17891 and 17934. Above that level, there is decent resistance at 18016.

To the downside and on an intra-week basis, the DOW will show minor support at 17580, minor to decent support between 17471 and 17484 and decent as well as short-term pivotal support at 17331.

On purely a chart basis, the DOW has traded over the past 14 weeks 200 points lower than last year's sideways trading range, suggesting that the bulls do not have as much innate fundamental strength as they had last year, which in turn also suggests that the probabilities slightly favor the bears, especially heading into the slow summer months.

Last year, the DOW broke the sideways trading range in July and went into a 5-week swoon which caused it to fall all the way down from 18131 to 15370 (17568 to 16106 on a weekly closing basis) over a 7-week period of time. In fact, the index has shown a July-August swoon on 4 of the past 5 years (the last 3 years in a row) with 2 drops of 5 and 6% (2013 and 2014) and 2 drops of 17 and 18% (2011 and 2015). This coming week will be all about the Brexit vote but the fact remains that a "no" vote against leaving the Euro will not change the fundamentals positively while a "yes" vote will change the fundamentals negatively. As such, the bears have the edge.

NASDAQ Friday closing price - 4800

The NASDAQ continued to lead the indexes to the downside, having dropped 2% in value this last week, compared to 1.1% by the DOW and 1.2% by the SPX. . The leadership to the downside suggests that the outlook for the mid-term (summer) is bearish and not only bearish for this week.

Contrary to the other indexes, the NASDAQ closed near the lows of the week, suggesting further downside below last week's low at 4778 will be seen this week. With the other index charts not being as clearly defined in the outlook for this coming week, the discrepancy suggests that the overall bias will be to the downside, at least until the Brexit vote comes out.

To the upside and on an intra-week basis, the NASDAQ now shows very minor but likely short-term pivotal resistance at last week's high at 4868. Further and stronger resistance will be found between the low end of the gap at 4917 and 4921. Decent resistance is found between 4969 and 4980.

To the downside and on an intra-week basis, the NASDAQ now shows minor support at last week's low at 4778 and minor again at 4734. Decent support is found between 4678 and 4684.

It must be mentioned that the 50-week MA in the NASDAQ, currently at 4845, and the 100-week MA, currently at 4803, are getting closer to crossing (the Death Cross), which is an event that has already occurred in the other 2 indexes and that has been indicative in the past of a strong down move happening in the near future. The NASDAQ last experienced the Death Cross in August 2008 and it should be mentioned that at that time it was the last index to experience it as it happened to the DOW in July and to the SPX in June. This year, it happened in March to the DOW and in May to the SPX and is scheduled to occur in the NASDAQ around mid-July, which is the time frame that fits in perfectly with the correction seen in the summer the past 3 years.

It must also be mentioned that in spite of the fact that both the DOW and the SPX have stayed above the MA lines during the past 13 weeks, the Death Cross has not been negated or even in the process of being negated. With the NASDAQ having straddled the lines during this period of time and having closed below the 100-week MA on Friday, it does suggest that the bears in the index seem to hold the best cards at this time, at least for the summer months.

The key support level in the NASDAQ is 4671-4684 which also represents the general support at 4700 as well as being a double low. If that area of support gets broken there is no established support until 4547/4563 is reached. By the same token, the minor support at 4734 needs to be watched closely because if broken, it would suggest the index will continue lower to that support area. A drop back down to 4671/4684 would create a triple low and those normally get broken. The 4734 level could easily be seen this week as it is only 44 points below last week's low and only 66 points from the close on Friday.

Probabilities favor the bears in the NASDAQ this week.

SPX Friday closing price - 2071

The SPX had a disappointing week, having confirmed the negative reversal seen the previous week from an 11-month new intra-week high with another red weekly close, as well as generating 4 daily closes in a row below the 2081/2084 level that has been so pivotal on the daily closing chart for the past year.

The SPX closed slightly in the lower half of the week's trading range, suggesting a higher probability of going below last week's low at 2050 than above last week's high at 2098. In addition, the bulls failed to generate any follow through buying off of Thursday's spike low rally and close on the highs of the week at 2079, suggesting that the 2081 daily close resistance level remains important and pivotal.

To the upside and on an intra-week basis, the SPX now shows minor but short-term pivotal resistance at 2085, minor again at 2099, minor to perhaps decent at 2111/2116 and decent at the recent high at 2120.

To the downside and on an intra-week basis, the SPX shows minor support at 2050, minor to decent at 2039/2044 and decent at 2025.

In the last 2 weeks, the SPX has gone from being an index ready to make new all-time highs to being an index ready get into a summer correction, probably all due to the fact that the Fed has turned Dovish once again and postponed an interest rate hike which in turn would have strongly helped the financial banking industry generate additional profits.

For the time being, the SPX is once again in a sideways trading range likely between 2039 and 2099 or even 2111 but with the slow summer months approaching, the probabilities have now shifted more to a correction occurring than any new highs happening.

The SPX, like with the other indexes, has also generated a July-August correction on 4 of the last 5 years and last year it was a 12.5% correction, the 2 years before that were 4.6 and 5.1% and in 2011 it was 19%. As such, the index could be looking at only a drop down to 2014, or down to 1855 and perhaps even to 1717, based on the those occasions.

Nonetheless, for this coming week the traders will be keying on the Brexit vote for some type of short-term direction, given that the corrections seen since 2011 have started in July and usually toward the end of the month. As such, if the Brexit vote is for them to stay with the Euro, the SPX is likely to generate a rally back up to the 2111 level over the next 2-3 weeks.

The key this week in the SPX is the 2085 level as a break of that area will likely push the index back up to at least 2099. By the same token, a break of 2039 would likely do the same and cause the index to drop to 2025.

Probabilities are about even with the SPX.

The indexes all generated follow through to the downside this past week after negative reversals occurred the previous week. Lower oil prices and Brexit fears were the main factors for the weakness and with the Brexit vote not due until Thursday, the probabilities favor a muted week as the traders await further news.

The only economic report of consequence scheduled for this week is Durable Goods on Thursday and with the Brexit vote due that same day, it is unlikely it will have any impact. With the indexes having mostly closed around the mid-point of the week's trading range, the probabilities favor an inside week until after the vote, with the only likely exception being the NASDAQ which is showing weakness in the Tech sector and because of that is likely to react to that a bit more negatively throughout the week than the other indexes.

The Brexit vote though is likely to generate more selling interest if the Brits vote for leaving the Euro than buying interest if they decide to stay in the Euro, meaning that there is more risk to the bulls this week than to the bears.