THE BOTTOM LINE:
The S&P and Dow put in a strong performance for the week. The Nasdaq Composite (COMP) and Nas 100 (NDX) also but they didn't clear their prior highs to the convincing degree of the big cap S&P and Dow 30.
COMP and NDX need to clear resistance at their prior highs in a manner to convince that tech still has the best upside potential.
Bullish sentiment didn't keep up and keep pace with the weekly rally. That's somewhat of a bullish plus to me in a 'perverse' contrarian sense.
I don't have any major overarching comments and will go next to the individual charts and commentaries.
MAJOR STOCK INDEX TECHNICAL COMMENTARIES
S&P 500 (SPX) DAILY CHART:
The S&P 500 (SPX) Index has resumed its bullish march with the close above its prior Closing high. SPX's chart resumes it bullish pattern; it never lost that pattern to any significant degree much given the minor pullback to the 1980 area just above support implied by its 50-day moving average. Bullishness went up a bit into Friday, just in time for some profit taking. Oh yeah.
There's a shot here for SPX to move up toward the upper end of its longstanding and broad uptrend channel. I've noted initial resistance at 2020, then up in the 2060 area.
Support is suggested around 2000, extending to 1980. Fairly major support should be found at SPX's up trendline, currently intersecting in the 1942 area.
At the recent lows the 13-day Relative Strength Index got down to a 'neutral' mid-range 50 reading. Significant sign of a bull market trend: the major indexes rarely get 'fully' oversold.
S&P 100 (OEX) INDEX; DAILY CHART
The big cap S&P 100 (OEX) bottomed nicely by tracing out repeated intraday support at 880 (and you were still bearish why?), then rallied convincingly to above the line of prior highs in the 890 area and did manage to touch 900 before profit taking pushed back.
900 is a milestone level (an even 100 figure). I still have some feeling that 1000 could be seen by the end of Q1 next year, but that puts me way ahead of the short to intermediate term!
900 is near resistance and then 910 next. Near support is at 890, then back in the 880 area. A decisive downside penetration of 880, without a rebound back above this level that day or the next is bearish; we might then be looking at perhaps 865 as a possible downside target.
THE DOW 30 (INDU) AVERAGE; DAILY CHART:
The Dow 30 Average (INDU) rebounding nicely from key support at 17000. No mystery there as it was pretty 'clear' from the charts that 17k was key support. Strong moves in DD, GS, HD (a bull flag pattern in its weekly chart suggests more upside to come), JNJ and MSFT were helpful. MSFT was kind of a dog in 2010-2012; Bill Gates stay away?
A little bit here, a little there and INDU had a decent week. Profit taking selling at the end of the week wasn't surprising.
Resistance is highlighted at 17400, and next up near the upper end of the Dow's broad uptrend channel, or around 17600 currently. A solid move from the low that formed at INDU's up trendline to now! Trendlines remain a major chart tool. I don't think Charles Dow used them. Doubtful.
Support is seen in the 17130-17100 area, with strong support at 17000. A Close below 17000 would be bearish; more so than I'm anticipating or can foresee currently.
NASDAQ COMPOSITE (COMP) INDEX; DAILY CHART:
The Nasdaq Composite Index (COMP) had a good-sized rebound from support in the 4500 area and has resumed its short-term uptrend. Intermediate and long-term trends have been steadily bullish since late-March 2009. One charting rule of thumb is to anticipate technical support in the area of prior highs which was the case with COMP this past week.
We can measure immediate overhead resistance in the 4600 area, but I don't have a next good target for resistance before about 4700-4720. However, 4680 might be a next stopping point if COMP continues to work higher above 4600.
Near support is highlighted in the 4550 area, then at 4500. 4450 is trendline support currently.
There wasn't much of a jump in bullish sentiment, which is a decent ancillary indicator or more upside potential. Trader 'sentiment' doesn't turn around on a dime; e.g., market watchers get worried about Fed tightening sooner than expected and they don't just give up such worries quickly!
NASDAQ 100 (NDX); DAILY CHART:
The Nasdaq 100 (NDX) chart is bullish as the past week saw an important Close above a prior line of resistance at and just under 4100. This level (4100) will be a key area to watch; see if it's a springboard to 4160 resistance. 4200 looks like next resistance above 4160.
Near support is seen in the 4050 area and next at 4000. 3900 is fairly major support.
On balance I look for a modest further rally but technical resistance at the upper channel line on both daily and weekly charts (weekly, not shown here) has me wondering if NDX can break out into a new up leg anytime soon.
NASDAQ 100 TRACKING STOCK (QQQ); DAILY CHART:
The Nasdaq 100 tracking stock (QQQ) is bullish and upside potential looks to be to the 102 area. Immediate overhead resistance comes in at 100.6.
Near support is highlighted at 98, then in the 96.4 area.
The strong advance is thought to be 'old' by some but downside corrections/pullbacks have come along occasionally and then prices snap back.
A jump in Friday volume on the pullback suggests some holders of long positions may be getting nervous. Risk to reward on buying the stock looks about even: downside 'risk' to 98, upside potential to 102.
RUSSELL 2000 (RUT); DAILY CHART:
The Russell 2000 (RUT) is the chart that really MIXED as the Index looks like it could go up, could go down. I'm watching for any sustained move below the current up trendline; conversely, for any sustained advance above the down trendline intersecting at 1172 currently. Near resistance is seen in the 1160 area.
Near support, again using the trendline as a measure comes in at 1144 but consider 1144-1140 as technical support. Next lower support comes in at 1130.
RUT, unlike my other featured indices, is getting near to an oversold reading in terms of the RSI. 'Oversold' in RUT starts at 40 on the 13-day Relative Strength Index and extends to 30.
GOOD TRADING SUCCESS!