THE BOTTOM LINE:
While the S&P 500 continues above 2000, the Dow struggles around 17150, the Nasdaq Composite at 4600 and the big cap Nas 100 at 4100. The Market looks to be consolidating as it throws of a minor overbought condition; I take the charts as mildly, not wildly, bullish.
BULLS SHOULD LIKE THAT:
Many stocks have paused in their up trends; even strong bull markets have to pause from time to time or risk getting over-heated.
Bullish sentiment has moderated some; everyone bullish can be a warning sign for a correction.
Employment data suggests the Fed will continue to keep rates low as we are not seeing consistent job growth.
BEARS NOTE THAT:
Europe slides into recession and the U.S. may be slowing down again.
The Dow 30 (INDU) could be forming a double top.
The super bull market in tech/internet could be cooling down; a possible harbinger of this is Apple (AAPL) hitting resistance at its September highs.
MAJOR STOCK INDEX TECHNICAL COMMENTARIES
S&P 500 (SPX) DAILY CHART:
The S&P 500 (SPX) Index is bullish as it continues to trade above 2000 for the most part. SPX has had a day here or there Closing back below 2000, but the Index keeps rebounding to above this key milestone level.
Near support is at 1990, extending to 1970. Major support begins at the SPX up trendline intersecting around 1940 currently.
Near resistance is seen at 2010, with intermediate resistance suggested in the 2045 area. Major resistance begins at 2100.
The S&P has gotten near to overbought RSI levels but isn't extreme on the charts. Nor is bullish sentiment at extreme hyperventilating levels. Currently, sentiment is more or neutral in terms of total daily (CBOE) equities call to put volume figures.
S&P 100 (OEX) INDEX; DAILY CHART
The big cap S&P 100 (OEX) is marking time also but isn't ABOVE a key big milestone level like big brother SPX. OEX would be in a similar chart pattern if it was trading above 900.
The few current OEX strong gainers such as AAPL, HD, MRK, NKE and UNH don't look to be enough to boost the Index above 900 currently. A good number of the member stocks in the 100 Index have pulled back from their recent highs.
The Index has been finding support in the 885-882 area. Next support comes in around 875. The 21-day moving average implies potential support in the 877 area currently.
Resistance/selling pressure has been coming in around 890-892. Next projected resistance is suggested at 900-902.
THE DOW 30 (INDU) AVERAGE; DAILY CHART:
The Dow 30 Average (INDU) is in what looks to be a bullish sideways consolidation on one hand, but there's a chart pattern risk also of a double top forming on the other hand.
Only 7 of the Dow 30 stocks: DIS, HD, INTC, MRK, MSFT, NKE AND UNH remain at new highs. GS is at similar risk to the overall Average of forming a double top.
All 22 of the other INDU stocks are trading down from their prior highs. More of these stocks can of course rally if a broad based Market advance gets going but currently I can only point to the aforementioned few that are in current strong bull trends.
Near INDU support is seen at 17 thousand, with next technical/chart support highlighted in the 16900 area.
A near-term line of resistance, formed by repeated intraday highs coming in in the 17150 area. Intermediate resistance is projected in 17400 area.
NASDAQ COMPOSITE (COMP) INDEX; DAILY CHART:
The Nasdaq Composite Index (COMP) is bullish, with near resistance seen at 4600; next resistance then is anticipated at the upper channel line, currently intersecting around 4700.
Near support is at 4550, extending to 4485, at the 'line' of prior highs; i.e., what was resistance, once penetrated, 'becoming' subsequent support. Fairly major support is likely to be found in the 4400 area at the current intersection of COMP's long-term up trendline.
COMP has pulled back from an overbought condition based on the 13-day Relative Strength Index; the weekly chart (not shown) RSI, on a 2-month basis, is high at around 70 but isn't at what I consider to be a major extreme. Usually, PROLONGED extremes above 76, even 80, preface substantial pullbacks.
Bullish sentiment readings aren't currently extreme either. As I noted in an initial comment I'm mildly, not wildly bullish. I get 'wildly' bullish on oversold pullbacks to major chart support when bearishness is high! Stay tuned on that!!
NASDAQ 100 (NDX); DAILY CHART:
The Nasdaq 100 (NDX) chart is bullish but the Index is also 'bumping' up against implied resistance at the upper end of NDX's broad uptrend price channel as highlighted below; technical resistance implied by this trendline comes in around 4120 currently. Next resistance, assuming a breakout above the upper channel line, is projected in the 4200 area.
Near support is at 4050, with more significant technical support at 4000. Major support is assumed at prior lows in the 3850 area.
I have no strong leaning to buy pullbacks, but a continued sideways to lower trend that took NDX back to a successful re-test of the 4000 level, especially with continued low volatility would suggest buying calls for a trade, but without staying in if 4000 gave way easily and/or repeatedly.
NASDAQ 100 TRACKING STOCK (QQQ); DAILY CHART:
The Nasdaq 100 tracking stock (QQQ) is bullish in its pattern and the stock so far has held near support at 99. Next support comes in at the 21-day average at 98, then in the 96.5 area.
Near resistance is at 100.2, then is projected near QQQ's upper trend channel boundary, currently at 101.6
Daily volume has been light and fairly typical with summer kind of rolling to an end. The employment report just released now begs for more bullish economic numbers before NDX might see another up leg develop.
A pullback to 98, even to close to 96 wouldn't be surprising ahead. On a risk to reward basis, buying such a dip may be favorable: risking to 95 (or on a Close below 94 for the more risk tolerant) with an upside objective to the 102 area.
RUSSELL 2000 (RUT); DAILY CHART:
The Russell 2000 (RUT) chart is mixed with a projected down trendline in play suggesting technical resistance in the 1180 area. Should there be a sustained breakout above 1180 resistance, there's resistance next coming in at 1196-1200.
Near support is at 1160, extending to 1150.
I have no trading suggestions. IF by chance you bought RUT calls when the Index got to its 'typical' oversold (RSI 33) and then exited after the Index retraced 2/3rds or 66% of its last downswing, congratulations on getting out on its upswing stall near 1180. Don't even think about any further trading given the current mixed picture. Lay down until any such feeling passes!
GOOD TRADING SUCCESS!