DOW Friday closing price - 16639

The DOW continued its recovery, having generated the third green weekly close in a row, as well recovering 10.5% from the low seen in January at 15450. The index closed near the highs of the week, suggesting further upside above last week's high at 17062 will be seen this week. The index recovery was further strengthened when oil also rallied and gave a short-term buy signal, meaning that one of the main reasons for the recent weakness has been removed. In addition, economic reports came in as expected, meaning that no new fundamental negatives were introduced.

The action this past week in the DOW suggests that the recent correction/downtrend is now over and that the traders are likely to get back to trading technically the established support/resistance levels that have been built during the past year. With no new fundamental positives, it is unlikely that resumption of the long-term uptrend will occur at this time.

To the upside and on an intra-week basis, the DOW shows minor resistance at 17151 and a bit stronger at 17350. On a daily closing basis, resistance is found at the 200-day MA, currently at 17180. On a weekly closing basis, resistance is decent between 17128 and 17279 which includes the 100-week MA, currently at 17245, and the 50-week MA, currently at 17305.

To the downside and on intra-week basis, the DOW shows minor support at 16887 and then nothing until minor support again is found at 16510. Below that level, there is decent support at 16165.

In looking at the DOW chart, it is evident that the 16500 level has become short-term pivotal support, meaning that small corrections and just "general" trading can take the index back down to that level but unless broken, further downside is not likely to be seen until the fundamental picture turns back to negative.

There is one chart item that is of importance for the short-to-near-term and that is the fact that the 50-week MA (currently at 17305) is close to crossing under the 100-week MA (currently at 17245). In the past 20 years there have only been 4 crosses of those lines and each cross has been of importance. In January 2001, the 50 crossed under the 100 and the DOW dropped over 3000 points in a period of only 18 months. In December 2003, the lines crossed again with the 50 going over the 100, which in turn generated a 44-month rally that took the index up over 4000 points. Once again, the lines crossed to the downside in August 2008 and caused the index to drop about 5000 points over a period of 2 years and once again the lines crossed to the upside in May 2010 and that generated a 60-month rally and a gain of 7000 points.

It is evident that this MA event is in the minds of the traders as this type of cross has been indicative in the past. As such, the bulls are trying to rally the DOW high enough to where it might prevent the cross of the lines. Nonetheless, with the lines now so close and them being longer term MA's it is unlikely the bulls will be successful rallying the index way above where the lines are presently at, and in turn preventing the cross, meaning that the probabilities now favor the cross occurring sometime in the next few weeks, which in turn would signal that a downtrend has begun.

Nonetheless, for this week, the probabilities favor the DOW moving up to test the MA's lines since there are no clearly defined obstacles this week that would prevent such a rally and the fact the bulls "need" to attempt to stop the cross of the lines or be faced with a strongly negative chart event. By the same token and for the same reasons, the selling interest will be increasing as well, especially given the longer term importance of the MA's lines, with the 200-day, the 50-week, and 100-week MA's that will be in play.

With the DOW having rallied 10%+ in value over the past couple of weeks, it also needs to be mentioned that the index is now strongly overbought on the daily chart (Slow Stochastic is at 100) and that is likely to prevent the strong and aggressive buying that is needed to generate the break of the MA's.

Possible trading range for this week in the DOW could be something like 17170 to 16890, with a close once again in the 17000 demilitarized zone but with the index closing in the lower half of the week's trading range.

NASDAQ Friday closing price - 4717

The NASDAQ generated a failure to follow through signal on Friday, having closed above 2 previous low weekly closes at 4634 and at 4683 that represented levels of support that stood up for over a year and that when broken brought about the new selling and the drop down to 4209. The negation of the break on Friday does suggest that the correction is over and that the index is likely to be in a sideways trend for the near future.

The NASDAQ closed near the highs of the week and further upside above last week's high at 4746 is expected to be seen. Nonetheless, the index closed just a couple of points above the 100-week MA, currently at 4715, and that is a line that has proven to be important for the index in the past, meaning that in spite of the strength seen this past week and the negation of the break that the bulls are still not in total control, at least when considering how much further upside can be accomplished.

To the upside and on an intra-week basis, the NASDAQ shows very minor resistance at 4785, minor to decent at 4814, and minor again at 4836 and 4862. On a daily closing basis using the chart for the last 52 weeks, minor to decent resistance is found at 484828 and decent at 4893, which is strengthened by the fact the 200-day MA is currently at 4888.

To the downside and on an intra-week basis, the NASDAQ shows minor support at 4657, minor but likely pivotal support at 4614 and then minor again at 4487.

Now that the bulls in the NASDAQ were able to overcome their first difficult obstacle (the negation of the break of support), it is likely their next objective is to close the weekly gap between 4926 and 4999 that has been in place since the first week of January. As long as that gap remains unclosed, the bulls will be at risk of a downtrend beginning that would cause new lows to be made at some point in the near future. Nonetheless, closing the gap is likely to require strong fundamental positives as the bulls would have to break resistance levels of long-term importance, such as both the 50 and 100 week MA, currently at 4900 and 4715 respectively, as well as the 200-day MA, currently at 4890.

The 50 and 100 week MA are strong lines in the NASDAQ and just like with the other 2 indexes, the lines seem to be on a path to cross sometime in the next 5 months, meaning that the bulls must attempt to get way above the lines (likely resume the uptrend) in order to prevent such a cross from occurring. The probabilities do not favor such an occurrence, meaning that the bulls seem to be fighting a battle that is unlikely to be won.

Nonetheless, the probabilities favor the NASDAQ heading higher this week with the resistance at 4810/4814 being the objective. The 4810/4814 was a resistance area that stood up for 6 weeks between November and December 2014 and from which a drop down to 4547 was seen before resumption of the uptrend occurred. Chart-wise there is no resistance until that level is reached, meaning that the bulls will have no excuse not to reach that level this week.

By the same token and given that the NASDAQ has been unable to outperform the other indexes of late, the bulls will need to once again make the index the primary one this week in order to accomplish reaching 4814, as it will require a rally 2.1% to accomplish that goal whereas the DOW will face resistance with a rally of only 1.6% and the SPX of only 1%. Simply stated, if the NASDAQ does not outperform the other indexes this week, it will be a negative sign.

The other thing to watch in the NASDAQ will be the close next Friday, as a red close (below this past week's close at 4717) would mean the bulls were unable to break through the 100-week MA, which in turn would be a short-term bearish sign. Probabilities favor the bulls.

SPX Friday closing price - 2000

The SPX bulls were successful in getting the index back to a pivotal weekly close support/resistance level at 2000, suggesting that what happens this coming week, at least on a weekly closing basis, could be longer term indicative.

The SPX closed near the highs of the week and further upside above last week's high at 2009 is expected to be seen. Nonetheless, the stock is reaching levels of previously important intra-week resistance between 2019 and 2020, as well as getting close to the important 50-week MA line, currently at 2035, that suggests that further upside is now going to be limited and difficult to achieve without positive fundamental help.

To the upside and on an intra-week basis, the SPX shows minor resistance at 2011 and minor to perhaps decent between 2019 and 2020. On a weekly closing basis, there is decent and likely indicative resistance between 2005 and 2010 that includes 2 previous high weekly closes and one low weekly close of importance, as well as the 100-week MA, currently at 2011, that has always been a line that has been a deciding factor in the past.

To the downside and on an intra-week basis, the SPX shows minor but likely short-term pivotal support at 1970/1972. Below that level, there is no support until minor as well as short term pivotal support is found at 1931. Further support is found between 1896 and 1904.

The SPX is definitely going to be the index to watch this week, given the wide array of important resistance levels close by. Unlike the DOW that can rally an additional 1-1.6% before encountering important resistance and the NAZ that can rally 2.3% before encountering "any" resistance, the SPX cannot rally more than 1% without breaking important resistance levels. As such, the traders are likely to watch the index the closest this coming week.

It is likely that the SPX will trade within a small trading range this week and likely straddling the 2000 level. A close above the 100-week MA next Friday would suggest further upside the following week, likely up to the 50-week MA. A close next Friday in the red would be a negative as it would mean the 100-week MA has been tested successful. As such, this coming week does have some chart implications that could be longer lasting.

The mixed signals given last week were quickly put to rest early in the week with oil prices breaking out of a 3-month swoon and the economic reports coming in as expected or slightly better, meaning that the bulls promptly took control and with little to no resistance above a rally occurred across the board. Nonetheless, the indexes are rapidly reaching the next and more important resistance areas that have more of a longer-term implications and will be more difficult to overcome without tangible positive fundamental news, and nothing of that sort is scheduled for this week.

In addition, there is a new item on the horizon that is of longer term importance, in the way of the 50 and 100 week MA's that are looking to cross sometime in the next 4-6 weeks, and that has only occurred 4 times in 20 years and that has been successful in determining trend for the mid-term. The short time frame in play will mean the bulls have to accomplish a very strong rally from these levels in just a few weeks to just attempt to negate the cross, and that is something that fundamentally does not seen possible at this time. As such, the market is likely to have some "doom and gloom mentality" appearing shortly.

Nonetheless, this week the bulls are likely to continue to be in control, as far as "some" further upside being seen, given that there are no economic reports scheduled that are likely to be seen as negative. In addition, oil prices as well as the Asian markets, seem to be supportive at this time, meaning that for the week the question is likely to be "how much will be done to the upside" rather than "will the bulls have any success?".