DOW Friday Closing Price - 44946
SPX Friday Closing Price - 6449
NASDAQ Friday Closing Price - 23712
RUT Friday Closing Price - 2286

Once again, the bulls won the week, given that the indexes continued to go upward. The DOW gained 1.7% in value, the SPX gained .9%, the NASDAQ gained .5% and the RUT gained 3%. The inflation report on Tuesday was mostly as expected and that gave the bulls new ammunition as the idea was that the Fed might drop interest rates 50 points in September. The rest of the reports this week were not supportive of that, given that the Manufacturing inflation number was higher (.9% vs expected .2%), Retail Sales were slightly lower than expected, and the Consumer Confidence number was lower than expected (58% vs expected 66%).

There were two "things" that were somewhat indicative with the first one being that the dichotomy between the DOW and the NASDAQ did turn around to favor the former and the second thing was that the small cap index was the leader this past week (3% vs 1.7%/.9%/.5%). Both of these "things" do suggest that this present rally is likely in the final stages ("safe" stocks DOW vs "speculative" stocks Tech/NASDAQ, and small cap stocks leading the way). As such, this coming week is likely to be more indicative of that, if and when that trend continues.

All the indexes closed in the upper half of the week's trading range, or near the highs, suggesting further upside above this week's highs will be seen this week. In the DOW that is above 45203, in the SPX above 6481, in the NASDAQ above 23969 and in the RUT above 2329.

One chart thing to mention is that the DOW did make a new all-time intraweek high and it was slightly confirmed with the index also making a new all-time weekly closing high (44946 vs 44911). Nonetheless, the daily closing chart did not confirm the breakout as it closed at 44946 but the all-time high daily close is at 45014. In fact, there is a double top at 45014 and at 45010 and if the index generates a red daily close any day this week (without making a new all-time daily closing high first), that double top will have a successful retest of it, which in turn will give the bears new (and possibly strong) ammunition.

One last thing to mention is the VIX (volatility index) made a new 5-month weekly closing low 4 weeks ago but did not break a pivotal weekly close support at 14.77/14.85 (closed at 14.93). The past 2 weeks, the index has closed at 15.15 and on Friday at 15.09). What is interesting to note is that the index did make a new 8-month intraweek low this past week (at 14.32 vs 14.58) but then the bears failed to confirm that break on Friday. If the index closes any day this week above 16.25, it will give a buy signal, which would suggest the overall market is likely in a correction format.

There are no possibly catalytic reports this week. The FOMC minutes from last month are due out on Wednesday. It is highly unlikely that there will be anything in that report that will help either side. Having said that, this market is presently fueled by positive emotions and "any" changes in that report, would give one side or the other fuel.

I do believe that this market is not only ready for a correction but in dire need of one. In the index market, there are no established supports below that are close-by enough to make continuing purchasing of stocks a safe or even a decent risk/reward scenario. With the possibility of the market continuing the uptrend for the rest of the year, new support levels need to be built. August and September are the seasonal months to do that.

HSI Index generated a new 47-month intraweek high but failed to confirm that breakout, having closed on Friday below the previous weekly closing high at 25388 (closed on Friday at 25270). The index did close in the upper half of the week's trading range, suggesting further upside above last week's high at 25762 will be seen this week. There is no established intraweek resistance above until 26229 (minor) and 26782 (decent) are reached. Having said that, the lack of confirmation on the intraweek breakout seen, does throw some doubt on the bullish picture. There are 2 levels to watch this week. On a daily closing basis, a close above 25667 will generate new buying and a close below 24858 will do the opposite (index closed on Friday at 25270).

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GOLD(Dec 2025 chart) generated a failure signal on the weekly closing chart, having closed on Friday below the previous weekly closing high at $3438, a level that was broken the previous week when it closed at $3491. Gold closed on the low of the week, suggesting further downside below last week's low at $3575 will be seen this week. Another red weekly close this Friday will generate a sell signal as the previous low weekly close at $3479 was almost broken (closed at $3481). The only daily close support level nearby is at $3348, meaning that it is unlikely that anything will be indicative until Friday. On a daily closing basis, resistance is found at $3452 On a weekly closing basis, it is at $3438.

OIL generated a new 10-week intraweek low and did confirm the sell and failure (against the bulls) signal on the weekly closing chart given the previous week. Oil closed in the middle of the week's trading range, suggesting equal chances of going below last week's low at 61.97 or going above last week's high at 64.43. A daily close above 63.97 or below 62.65 will generate some new buying or selling. On a weekly closing basis, those two levels are at 64.48 and at 62.49.

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