THE BOTTOM LINE:
The NYSE traded stocks seemed bound to level off unless Nasdaq lifted and lift it did. Dow nears historic highs.
A note on the Dow and Dow Theory: A Close in February that's above 13930 would put the Dow 30 Average (INDU) at a new all-time closing monthly high. By the concepts of Charles Dow such a move in the Industrials that replicates the Transportation Average at new closing monthly highs flashes an 'all-clear' signal regarding continuation of the long-term trend; up, in this case.
The Dow Transportation Index (TRAN) has had a sharp climb since the first week of the new year. Per TRAN'S weekly chart above, these stocks led to new all-time times. By the concepts of Dow, a 'confirming' higher Closing high in INDU that follows the other Average (TRAN) higher is 'confirmation' or an all-clear signal so to speak in terms of predicting a continued bull market. I take it to mean that investors feel more comfortable going in looking out over two years, especially in relationship to other asset classes.
Dow bellwether IBM is strongly leading the pack of several Dow stocks in strong uptrends. Based on the stocks INDU can start finding a home above 14000.
MAJOR STOCK INDEX TECHNICAL COMMENTARIES
S&P 500 (SPX); DAILY CHART:
The S&P chart continues to maintain its very strong bullish climb along the top of the projected uptrend channel. Somewhere in here there will be a scare and prices will fall off and trader profit taking sets in. A pullback to the 1480 area would not be surprising; nor would a further climb toward the record prior high in the 1560 area. SPX may have trouble holding above 1500 at this juncture. Later, yes.
Support as noted around 1480, extending to 1460. I keep looking for a pullback but the S&P just keeps chugging higher. One clue as seen in my Trader Sentiment numbers. Bullish sentiment lagged into the late-week Friday rally. Traders in options were not that bullish but investment money is coming into stocks and that's what counts.
S&P 100 (OEX) INDEX; DAILY CHART
The S&P 100 (OEX) chart is bullish in the same pattern as seen with the S&P 500. OEX has also been hovering at RSI highs that highlights a 'typical' overbought condition just as with SPX.
Support is at 675 near-term, with more intermediate support in the 660 area.
Resistance is projected by the upper line of OEX's uptrend channel, suggesting next resistance at 685-690.
OEX's ability to hold above 680 keeps the index on a solidly bullish track chart wise but the indicators like RSI suggest a higher than normal likelihood of a correction.
THE DOW 30 (INDU) AVERAGE; DAILY CHART:
The Dow 30 (INDU) is bullish in its pattern. INDU continues to follow its upper trend channel like higher suggesting a move being sustained by big money going into stocks. Investors are starting to warm up to stocks, especially in comparison to other return possibilities from completing asset classes. bellwether IBM and a number of other INDU stocks are in strong uptrends; e.g., DIS, HD, JNJ, KFT, MMM, PFE, PG, TRV.
I'm anticipating resistance coming in around 14050 to 14100. I am also looking for near support at 13860. More intermediate support begins at 13650-13600 area, extending to 13500.
I don't want to bet again the Dow continuing higher, 'overbought' or not, but at some point such extremes suggest correction sooner rather than later. Still, highs do get extended. Stay tuned.
NASDAQ COMPOSITE (COMP) INDEX; DAILY CHART:
The Nasdaq Composite is bullish in its pattern, especially having now broken out above COMP's most recent trading range; one that takes the shape, but irregular, of a bullish rising wedge. It's akin to that. The decisive upside penetration of the upper line of that sideways formation suggests COMP may again be headed to the upper end of its uptrend channel.
Near resistance looks like 3200, then a stronger 'line' of resistance at the upper end of COMP's uptrend channel suggesting pivotal resistance around 3230-3250.
Support is seen at 3100-3080, extending to 3050.
NASDAQ 100 (NDX); DAILY CHART:
The Nasdaq 100 (NDX) has achieved a bullish move above the top end of a long-standing sideway 'rectangle' pattern. Such a sideways move after a prior advance, has to be (so to speak) 'assumed' to be a consolidation before a next up leg. True to a pattern so far that suggests substantial further upside potential in NDX.
I assume NDX is going higher; headed toward at least a test of resistance round 2800, extending to 2835-2850.
Support should be found initially at 2750 which was the recent NDX 'break-out point', with support then extending to 2715-2700.
NASDAQ 100 TRACKING STOCK (QQQ); DAILY CHART:
The Nasdaq 100 tracking stock (QQQ) has a continued bullish chart and the latest surge now putting QQQ above recent resistance and a zone of buy-sell congestion at 67.3-67.5
Next resistance and a bit of a guess on that is 68.3, extending to 68.5 at the upper trend channel line. Always a marker sometimes a stopper.
Support is seen at 66.5, extending to 66.0
Volume surged on this last spike higher in QQQ, suggesting some bulls are really starting to believe that the stock has some decent remaining upside!
RUSSELL 2000 (RUT); DAILY CHART:
The Russell 2000 (RUT) Index continued to climb higher, remaining in its relatively steep uptrend channel. A very strong performance and in line with seasonal trends for the Russell small to mid-cap index.
I've highlighted expected resistance if RUT was to climb into the 927 (call it 930) to 940 price zone.
Support is seen at RUT's up trendline, currently intersecting at 886; support then extends to around 875. Major support is expected in the 850 area.
GOOD TRADING SUCCESS!