DOW Friday Closing Price - 42863
SPX Friday Closing Price - 5815
NASDAQ Friday Closing Price - 20271
RUT Friday Closing Price - 2234

Once again and for the 2nd week is a row, all indexes (with the exception of the RUT) made new all-time or rally weekly closing highs. The limited amount of news this week was mixed, given that the inflation report was slightly worse than expected (.2% vs expected .1%) but the earnings reports (JPM and WFC were better than expected but the momentum to the upside kept the bulls in control. With no likely-to-be-catalytic reports due out this week, there seems to be nothing to stop the bulls from taking the market higher.

This week and on the economic front, the Retail Sales report comes out on Thursday and it is expected to be at .2% (up from 1% the month prior) and on the Earnings front, bank earnings will continue on Tuesday and Wednesday (GS and MS - expected higher than last year) and then NFLX on Friday (also expected higher than last year). None of these reports are generally catalytic and as such, not likely to turn the tide around.

Having said all of the above, the NASDAQ and the RUT are still trailing the other indexes and the VIX remains high and these factors still have to be addressed by the bulls, if they want to continue high unabated. The NASDAQ closed on Friday at 20271 and the all-time high weekly close is at 20391, meaning that a weekly close next Friday 122 points higher will give the bulls additional ammunition. On a daily closing basis though, the all-time high daily close is at 20675, so the bulls need 405 points more to accomplish that. The RUT has a multi-month high weekly close at 2260 (2263 on a daily closing basis) and given that it closed on Friday at 2234, it needs just 30 points higher on a daily and weekly closing basis for those levels to be broken.

Evidently, the NASDAQ remains the index to watch as it is the index that normally leads the way in a bull market. NVDA is a bit of a key here as it is the #1 stock in the index and in the market. The stock did make a new all-time weekly closing high of Friday (closed at 134.80 and the previous weekly closing high was at 131.88). Nonetheless and on a daily closing basis, the all-time high is 135.88. The bulls are committed to making a new all-time daily closing high this week, given that the 2 previous daily close resistance levels of consequence were broken and if they fail to make a new daily closing high and a daily close below 130.00 occurs, it will be an indicative failure signal. As such, the NAZ and NVDA are the two to watch closely this week.

Here are the daily closes that would weaken the hands of the bulls. In the DOW, a daily close below 42352 would weaken the bull's hand and a close below 42191 would generate a sell signal. In the SPX, the same 2 levels are at 5762 and at 5695. In the NASDAQ, those levels are at 20115 and at 19773 and in the RUT those levels are at 2218 and at 2180.

There is one additional thing that is presently a bit of a "hole in the road" that the bulls must address to take the market higher, and that is the VIX. The index closed on Friday at 20.46. In a normal bull market, the index would be trading below 15 but given that it is so much higher, this keeps the bulls from being aggressive. A daily close above 22.64 would give the bears ammunition and a weekly close above 23.39 would generate strong selling interest. One other thing to watch is that the 200-week MA is currently at 19.37 and a close below that would defuse the situation somewhat.

It is clearly evident that the traders are leaning to the upside as the economy continues to look healthy. Nonetheless, the overbought and overdone condition existing at this time, as well as high EPA ratios presently being seen are negatives that will Impact this market at some point. Nonetheless, it does seem that some catalyst is needed to get the bulls off of this runaway train.

HSI generated a negative reversal week, having made a new 31-month intraweek high and then going below the previous week's low and closing in the lower half of the week's trading range, suggesting further downside below last week's low at 20637 will be seen this week. The index did break 2 intraweek resistance levels at 22449 and at 22700 (high of the week was 23099) and that does change the chart from a downtrend to sideways trend or even a slight up channel. Weekly close support will now be found at 19898 (19636 on a daily closing basis), meaning that the index could head down another 1600 points from Thursday's close. Nonetheless, that level should be support from now on and the possibilities of getting above the recent intraweek high at 23099 within the next month or two are high.

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GOLD(Dec 24 chart) generated a positive reversal, having made a new 3-week low and then closing green and on the high of the week, suggesting further upside above last week's high at $2679 will be seen this week. Gold did make a new all-time weekly closing high and that suggests that the uptrend continues unabated. On an intraweek basis, the all-time high is $2696 and that is likely to be broken this week. If Gold does go above last week's high, last week's low at $2618 will become the new short-term pivotal support.

OIL generated a new 8-week intraweek and weekly closing high and closed in the upper half of the week's trading range, suggesting a slightly higher possibility of going above last week's high at 78.46 than below last week's low at 71.53. Having said that, Oil did drop almost $7 between Tuesday and Wednesday, suggesting that the bulls are not in full control and a such, it is more likely that Oil is in a trading range than in any sort of a trend. Nonetheless, some further upside is likely to be seen with the objective being 79.00-79.60. Last week's low at 71.53 has now become pivotal support.

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