DOW Friday Closing Price - 41317
SPX Friday Closing Price - 5686
NASDAQ Friday Closing Price - 20102
RUT Friday Closing Price - 2020

This past week turned out to be a win for the bulls, with all indexes rallying between 2.8% and 3.8%. It was a week full of economic and earnings reports of consequence. The first report was a negative one with the GDP number coming in negative at -.3%, meaning the economy is shrinking. Nonetheless, the PCE inflation number showed further decline, the ISM number being slightly better than expected, the Jobs report coming in better than expected and the earnings reports on AAPL and AMZN also coming in slightly better than expected. The GDP was negative to the market and the indexes opened substantially lower but the fact that the economy is shrinking suggests that the Fed may begin cutting rates sooner (rather than later) and that was a positive. That day, and in spite of the lower opening, the indexes closed green and the rest of the week, more green was seen.

Chart-wise, nothing of great consequence occurred. Buy signals were given on the daily closing charts and some minor weekly close resistance levels were broken, but considering the downtrend that started in February, the indexes remain below the 200-day MA's, and that means that the downtrend remains intact, or if a bottom has been found, more retesting of the lows, as well as rebuilding of support levels will likely be seen. Having said that, the NASDAQ did get up to the line and the SPX is within 46 point of the line and the overall negative outlook of the tariffs remain, meaning that at this time, further upside of any consequence is unlikely to be seen.

It does need to be mentioned that the NASDAQ has been the leader to the upside, having rallied 17.8% from the lows and the DOW only 11.2% from the lows. Nonetheless, the big 5 companies in the index (AAPL, AMZN, GOOGL, NFLX and META) have already reported earnings and both (AAPL and AMZN) which reported earnings on Thursday night, closed red on Friday, which suggests the driving force for the index has gone away. The 200-day MA is currently at 20176, and that was Friday's high. It is expected the indexes will go higher this coming week but unless the index generates a confirmed close above the line "and" breaks above 20298, it is likely the rally is over.

The Fed reports its rate decision on Wednesday, and it is NOT expected that they will cut rates at this time. If that is their decision, the negative GDP number will weigh heavily on the market and selling interest is likely to be seen. In addition and giving extra support to the "selling interest" idea is that the indexes have closed green for the past 9 days and no support levels have been built nearby below. The NASDAQ does show a breakaway/runaway gap at 18396 and at 19612 and the very least expected is that the runaway gap will be tested this coming week. If closed, the breakaway gap will become a magnet. The index has moved up 2300 points (11.5%) without any pullback and the fundamental picture does not support that scenario. In looking at the daily closing chart, a drop back down to 18421 is a definite possibility.

As far as the other indexes are concerned, the DOW is still 905 points away from the 200-day MA, meaning it has not truly participated in the rally like the other indexes have. The line is at 42222 but there is minor-to-decent daily close resistance at 41568. In the SPX, the MA line is at 5746 and there is pivotal daily close resistance at 5776. The RUT has actually outperformed the other indexes, inasmuch as the index has rallied 12.9% (compared to the NAZ at 11.5%) and did close above the 200-week MA (currently at 2004). Nonetheless and with the index still being 166 points below the 200-day MA, the close above the weekly MA is not that indicative, other than to suggest that the downtrend is over and that the index might keep overperforming the other indexes from here on in.

The indexes did close on the highs of the week and further upside is expected to be seen, above last week's highs (DOW at 41386, SPX at 5433, NAZ at 20176 and RUT at 2026). The thing to watch this week is the DOW vs the NASDAQ dichotomy. If the indexes have reached a top to this rally, that dichotomy should favor the DOW (the opposite has been seen the past 4 weeks). In fact and given that for the first 2 days of this week, there is nothing in the form of reports to prevent the bulls from taking the indexes higher, the dichotomy will be a great indicator. In addition, the SPX and the NASDAQ have already gone above last month's highs, while the DOW and the RUT have not. As such, if these two latter indexes outperform the other two at the beginning of the week, it will be indicative. Having said all of this, if the present dichotomy continues and the NASDAQ gets above 20292, it will likely rally up to 20696 and perhaps up to 21182. If that occurs, it will be a "new" ballgame.

HSI index generated a 3rd green weekly close and closed near the high of the week, suggesting further upside above last week's high at 22276 will be seen this week. The same scenario regarding the unlikelihood of news coming out this week applies here as well, meaning further upside is likely to be seen this week. There is an open gap at 22638 that is highly likely to be reached. On an intraweek basis, there is no resistance of consequence until 23241 is reached, meaning that is a target if no negative news comes out. Nonetheless and on a daily closing basis, the 22536 level has some meaning, as a confirmed close above that level would generate a failure signal against the bears. Having said that, that level was not a major pivotal support, meaning that a failure signal in this scenario, is not as indicative as it would normally be. On a weekly closing basis, the 22736 level is indicative resistance, suggesting the gap (658 points high) is likely to be reached, but further upside is likely to be strongly limited thereafter. No pivotal support level nearby below.

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GOLD(Jun 2025 chart) seems to have found a top to this rally, having dropped 8.6% over the past 2 weeks and giving a clear sell signal on the daily closing chart, having closed below the low daily close at $3294 on Thursday, and then confirming the sell signal on Friday (closed at $3257). The lower than expected inflation number that came out Thursday morning in conjunction with the Fed not expected to lower interest rates this week and Gold having dropped $239 the week before, caused the bulls to take profits. The inflation and interest rate scenario has not totally changed, to where it could be considered that Gold has found a major top, but it has changed to where the bulls will wait for more fundamental information before resuming the uptrend. In the meantime, some new support building action is likely to occur. For now and until more is known, the $3000 level is now important support ($2970 to be exact). A drop down to the $3000 demilitarized zone has become a possibility if not a certainty, to happen over the next few weeks. By the same token and using the daily closing chart, the $3294 level is now short-term resistance. For "this" week, the $3166 level is support and not likely to be broken.

OIL made a new 4-year weekly closing low and closed near the low of the week, suggesting further downside below last week's low at 56.41 will be seen this week. This move down has changed the chart picture in favor of the bears now being in full control and the $48-$50 level being the objective, to be reached sometime over the next 1-3 months. This is supported fundamentally with lower demand for oil due to the economic problems associated worldwide with the tariffs and the fact that OPEC has actually raised oil production due to the low prices being seen. On a weekly closing basis, the $54-$55 level is now the objective and the $60 level (specifically 59.68) is now resistance.

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