DOW Friday closing price - 11145

The DOW made a new 18-month weekly closing high on Friday while confirming the break of the 200-week MA with a second close in a row above the line. The traders shrugged off the negatives of the week (GS news and lower Durable Goods) and plunged forward with some abandon, suggesting that further upside is now likely. With no nearby resistance until the 11350-11400 level is reached, if there is any follow through this coming week (likely) a rally up to that level is probable.

There are no economic reports of consequence due out until Friday when GDP Adv comes out. As such, the DOW is not likely to see any selling coming in based on the charts until chart resistances up between 11350 and 11400 are reached. With momentum being so strong, the probabilities favor more upside this coming week, at least the first part of the week.

On a weekly closing basis, recent resistance is minor at 11422 and decent at 11734. Going back to 1999/2001 there is decent resistance at 11210/11221, strong resistance at 11301, and major resistance is at 10523. On a daily closing basis, resistance is minor to decent at 11388, minor at 10511, and strong at 11782. On a weekly closing basis, support is minor to decent at 10325/10329 and strong at 10012. On a daily closing basis, support is minor at 10019, again at 10898 and once more between 10836 and 10857.

The DOW has continued higher inexorably and now the main problem for the bears is that they need a "strong" negative catalyst to stop the momentum that is reaching a crescendo basis. All dips are being bought aggressively and that continues to fuel further and further upside.

From a chart perspective, previous highs resistance will start up at 11350 and go all the way up to 11750. The resistance between 11350 and 11400 was strong back between Sep00 and May01. Nonetheless, the strength of that "old" resistance is suspect. On a more recent basis, resistance starts up at 11670 and goes all the way up to 11897. That is resistance seen in 2006 and the higher numbers from 2008. As such, those levels are likely to have a bit more meaning. In addition, it must be mentioned that 11750 was a level that stopped the rally in the year 2000 that started in 1998 and that level held up for 6 years before being broken. As such, that is another level that will be in the minds of the traders.

It must also be mentioned that in 2003, when the DOW was in a very similar bull run to the upside, the index broke above the 200-week MA (at that time at 9725) and ran up 1000 points up to 10754 in a period of 12 weeks before topping out. If this is the same kind of bull market as was seen then, the probability of another 1000 points to the upside (up to 12100) is high.

Evidently this coming week is very important as all breakouts need to be confirmed with a second close. It also can't be forgotten that the Elliot Wave Theory states that a major top will be made by the first week of May and that is only one week away. In addition, the monthly chart, which closes this week on Friday, also has an important level to look at. The 50-month MA is currently at 11155, and going all the way back to the year 2000, the index also shows decent monthly close resistance at 11215. So with this week being the monthly close, as well as the time frame for the Elliot Wave, it can be said that what the DOW does this week, and where it closes, is important.

Once again the DOW generated another higher low than the previous week (11th week in a row). As such, last week's low at 10978 has to be considered a support level and likely important pivot point. The 200-week MA, currently at 11120 is also likely to be an intra-week pivot point as well as Friday's close at 11145 a level that will be in play if the follow through is not as strong as Friday's actions suggests it will be. These are the levels to watch this week for clues as to what the traders are thinking.

The probabilities favor further upside this week with a possible upside objective of 11350/11400. Nonetheless, it is possible that rally will occur early in the week and give it up later on in the week as the important economic reports come out. Friday's close is likely to be indicative. Unfortunately intra-week moves don't mean anything on the weekly and monthly closing charts. As such, this week will be difficult to figure out early in the week.

NASDAQ Friday closing price - 2530

The NASDAQ had a strong week outperforming the other indexes based on the much-better-than-expected AAPL earnings report. The index closed at a chart level that if broken next week would mean the index is in a raging bull market.

Due to the stated objectives that analysts have given AAPL and the fact that stock is 17% of the index, it is likely that the NASDAQ will continue higher this week unless the overall market fails. AAPL has to be considered one of, if not the best, fundamental stock at this time. The probabilities of the stock dropping are negligible and therefore the probabilities of the index continuing higher are high.

On a weekly closing basis, strong resistance is found at 2529. Above that level, there is no resistance until the 2692 to 2706 area is reached. 2700 level is reached. On a daily closing basis, decent to strong resistance is found at 2550. Above that level there is no resistance until 2692 to 27.06 is reached. On a weekly closing basis, support is minor at 2326 and again at 2290. Strong support is found at 2239 and a bit stronger at 2210 (200-week MA). On a daily closing basis, support is minor to decent at2480, minor at 2431, decent at 2397/2398, and minor again at 2374 and at 2362. Below that there is no support until minor support is found between 2282 and 2288 and minor again at the 50-day MA, currently at 2270.

The NASDAQ closed on Friday at a weekly closing level of "great consequence" at 2529. Above this level there is absolutely no weekly close resistance until the index nears 2700. There is some daily close resistance still left at 2550 and on an intra-week basis at 2551, but if the index manages to close in the green again next Friday, there is nothing but open air above for another 180 points.

With nothing but good news and positive earnings reports, the probability favors continued upside momentum. Nonetheless, any red close next Friday would set up a double top of consequence at 2529/2530. As such, the close this coming week is likely to determine the trend for the next 3-6 months.

The NASDAQ closed in the highs of the day and of the week on Friday and follow through to the upside is expected to be seen on Monday, especially since there are no economic reports due out that day. On a daily closing basis, there is still one resistance of consequence at 2550, and it is likely that level will be tested at some point this week. There are 3 economic reports due out this week that could have en effect starting with the Consumer Confidence number on Tuesday, the FOMC meeting decision on Wednesday, and the GDP Adv on Friday.

At this time, though, and with the expected continued strength in AAPL there seems to be little in the way of fundamentals that could stop the index from going higher. Nonetheless, like with the DOW, the NASDAQ has had 11 weeks in a row with higher lows than the previous week and therefore last week's low at 2452 will be the key to the index. If that level gets broken this week then it is possible, maybe even probable that a top is in place. For now, though, the probabilities favor further upside with at least at 2550 objective.

SPX Friday closing price - 1217

The SPX continued to under perform the other indexes, mainly because the financials institutions took the brunt of whatever selling there was this past week. The index was not even able to get up to the 200-week MA (currently at 1225) even though the DOW was able to get up and above its 200-week MA. Nonetheless, the index did close higher than last week, above the a minor to decent weekly close resistance at 1213, and within 8 points of the MA.

The SPX does have additional previous weekly close resistance of some consequence from 1222 to 1230 (from Feb05 to Nov05). As such, the index is likely to be as much of an indicator this week as the NASDAQ is likely to be.

On a weekly closing basis, resistance is decent between 1222 and 1230. Above that level there is decent resistance again between 1278 and 1290. On a daily closing basis, there is minor to decent resistance if found at 1255. Above that level there is nothing until decent resistance is found at 1283 and strong at 1305. On a weekly closing basis, support is minor at the previous high weekly close at 1145 and then nothing until strong support at the previous weekly low close at 1066. Below that level support is decent at the 100-week MA, currently at 1038. On a daily closing basis, minor to decent support is found at 1192. Below that level, minor support is found at 1189, at 1169, at 1166, and at 1160. Support is then non-existent until the 50 and 100-day MA are reached between 1125 and 1130.

The SPX in conjunction with the NASDAQ are the indexes to watch this week as both indexes are at levels of resistance of consequence. The SPX still has a bit of room to the upside as the weekly close resistance is between 1222 and 1230. Having closed at 1217 it means the index could go up another 5-13 points without breaking resistance.

The SPX had an outside week having gone below last week's low and closing above last week's high. As such, it is possible that traders will be concentrating more on what this index, for direction, does than in others. It is evident that the 200-week MA is where the concentration will lie. With strong previous close weekly resistance scattered between 1222 and 1230, any close above 1230 next Friday would be a major breakout. By the same token if the index fails to generate a breakout and goes below last week's low at 1184, the probabilities that a top has been made will be high.

The GS situation, as well as the Greek financial problems will be the fundamental keys this week. Probabilities favor the upside.

The probabilities have now shifted toward the upside with the rallies and closes seen this past week. As such, this coming week will be more about re-confirmation of the strength seen than about anything else.

The NASDAQ has the most important close of all because if it closes higher next Friday, it will mean the bulls have "won" and that the index is confirmed to be in a "major one-of-a-kind" bull trend. By the same token, if the index fails to close higher, the Elliot Wave theory is likely to be confirmed as well, making whatever high that is seen this week into a major top of 12-18 month duration. As such, this coming week is very important for the longer term trend.

The probabilities favor the bulls because the momentum is strong and the market doesn't seem to be reacting negatively to any news or technical factors, such as resistance levels or hugely overbought conditions. It is a dangerous situation for both the bulls and the bears because it is such a pivotal week that both sides are facing the possibility of a strong move in either direction once the direction is determined.