THE BOTTOM LINE:
The S&P 500 (SPX) and the Nasdaq Composite (COMP) both held support implied by the low end of their long-standing uptrend price channels and rallied from there. Both major indexes are above (SPX) or well above (COMP) their 2007 weekly Closing highs. SPX has found repeated support at 1540, with COMP holding above 3160-3200 for the most part.
If the S&P 500 ends April at or above 1582 (Friday's Close), this would constitute a decisive breakout above any possible huge triple top formation relative to SPX's very long-term monthly chart. A 1580 close or higher on Tuesday, 4/30 (the April monthly Close) would allay concern of another third major top forming in the 1570 area in SPX.
The tech-heavy Nasdaq indices, which had been lagging the S&P and Dow, are again within striking distance of their prior recent highs; at 3300 in COMP and the 2865-2877 zone in the Nas 100.
The Dow 30 (INDU) is lagging a bit here but to keep INDU in perspective, the Average is holding well above its prior 2007 peak in the 14200 area. Even the small to mid-cap sector as represented by the Russell 2000 (RUT) is holding up ok and finding support at 900.
All in all, the uptrend is alive and well even through bouts of volatility and the recent sharp but short-lived (downside) correction. I'm assuming the bullish intermediate and long-term trends will continue.
MAJOR STOCK INDEX TECHNICAL COMMENTARIES
S&P 500 (SPX); DAILY CHART:
The S&P 500 (SPX) chart remains bullish with the Index's ability to hold 1540 support both in terms of its up trendline and prior recent intraday lows. Support is this week seen at 1560, extending to 1550, support implied by SPX's up trendline.
Key resistance is apparent in the 1596-1600 area, then at the upper end of SPX's uptrend channel line, currently intersecting around 1620. If SPX ends April at or above 1582 (Friday's Close), this would constitute a decisive upside penetration of the triple top seen on SPX's very long-term monthly chart. Stay tuned on that!
I anticipate the S&P to continue to move higher on balance. On a short-term basis SPX is pulling back from an hourly overbought situation and could dip again to 1560-1555 but which would likely offer a bullish play for short-term traders.
The 13-day Relative Strength Index (RSI) seen above is showing sideways to slightly downward momentum and wouldn't dip to an oversold reading absent a substantial further dip.
My CPRATIO bullish-bearish sentiment indicator, also seen above, registered a 1-day bullish reading at the last low and that level of bearishness was telling for the prospects of a rebound.
S&P 100 (OEX) INDEX; DAILY CHART
The S&P 100 (OEX), unlike the S&P 500, hasn't yet cleared its prior all-time highs. The October 2007 weekly closing high at 727 remains a pivotal area of potential resistance on a longer-term chart basis. Judging by prior intraday highs I'd say that the key resistance zone is 727-733.
OEX's remains within its bullish uptrend channel and the Index looks to be consolidating at and above 710 near support, with the Index seemingly likely to challenge prior recent highs in the 715 area and then march toward a retest of 727-733 resistance. A daily and especially a weekly chart close above 730 in the next 1-2 weeks would extend the current bullish pattern.
While there looked to be support/buying interest in the 710 area most recently, I've noted lower trendline support as coming in around 700-698, with technical support extending to 693.
THE DOW 30 (INDU) AVERAGE; DAILY CHART:
The Dow 30 (INDU) is bullish as the INDU Average continues to work higher within its uptrend channel.
Not too long ago I rated 2/3rds of the individual INDU charts as being in bullish to very bullish uptrend patterns. However, of the 30 Dow stocks we're back down to around 18 (AXP, BAC, BA, CVX, DD, DIS, HD, JNJ, JPM, KFT, MCD, MRK, MSFT, PFE, TRV, UTX, VZ, WMT) in clear cut bullish trends, with the addition of AA and INTC as having further upside potential. GE, IBM, PG and T have been or are faltering recently and in possible corrective patterns.
Near resistance in the Dow is at 14750, then at 14870. Longer term potential remains for a move to the 15000-15200 area.
Near support is highlighted at 14555, then at 14435. Any daily Close, at least one not reversed the next trading day, below 14400 would be a bearish development.
NASDAQ COMPOSITE (COMP) INDEX; DAILY CHART:
The Nasdaq Composite (COMP) chart remains bullish in its pattern after holding support implied by the low end of its uptrend channel. The fact that the most recent low was above the prior downswing low was also bullish.
It looks like COMP has the potential to pierce key 3300 resistance and perhaps pop up again to the UPPER end of its uptrend channel at 3350-3370.
Near support is 3250, next at 3200, extending to the 3185 area.
COMP is at the midpoint of its uptrend channel and risk to reward doesn't favor putting on further bullish strategies. Buying a dip to 3200 area probably another story.
NASDAQ 100 (NDX); DAILY CHART:
The Nasdaq 100 (NDX) remains within its bullish uptrend channel but doesn't have much further to go to touch its top end resistance area again. Risk to reward considerations suggest selling into rallies, especially to the upper trendline.
Resistance implied by the upper end of the aforementioned channel is at 2900-2910 currently.
Support is at 2810-2800, extending to 2750 at the low end of NDX's uptrend channel.
NDX has important resistance in the 2865 area near-term so a decisive upside penetration here would suggest further upside potential to 2900-2910. If current resistance is again not overcome, downside risk on another dip looks like at least back to 2800 if not back to the 2750-2770 area.
NASDAQ 100 TRACKING STOCK (QQQ); DAILY CHART:
The Nasdaq 100 (QQQ) tracking stock has a bullish chart. QQQ remains within its broad uptrend channel so the trend suggests further upside potential but probably only equal further upside potential, from current levels, relative to downside. QQQ is at the midpoint of the uptrend channel I'm working with. Downside potential on another dip is back to 67.5-66.9 or so.
Upside potential, assuming that key resistance at 70 is pierced, looks to be to the 71.6 area, the current top end of QQQ's uptrend channel.
RUSSELL 2000 (RUT); DAILY CHART:
I wrote last time (4/20) that the intermediate trend would remain bullish if RUT held above 900 and bullish it remains. I redrew RUT's up trendline on the last sell off and this lower sloping trendline then intersected in the 900 area, support also implied by the late-February lows.
Over the last 3 years earnings growth of smaller companies have been lagging those with revenues greater than $50 million. Nevertheless, this sector is still in some favor for investors; possibly more so with smaller investors.
RUT technical support is at 920, then at 906-900. A couple of daily closes below 900, certainly so on a weekly chart basis, would be bearish.
There is a well-defined line of resistance at 953 in RUT; next resistance then is assumed for the upper end of RUT's uptrend channel, currently intersecting around 993 and extending to 1000 over the next few trading sessions or by May 7th.
GOOD TRADING SUCCESS!