THE BOTTOM LINE:
The Market is marking time, neither able to penetrate resistances at prior recent highs or able to break very far before buying comes in. The kind of recent holding pattern in the major indices is common in markets that are basically and fundamentally seeing solid buying on dips and that's still the case.
By the charts, the major indexes look vulnerable to lower prices over the next 2-3 weeks and the cycle that I follow most closely.
MAJOR STOCK INDEX TECHNICAL COMMENTARIES
S&P 500 (SPX); DAILY CHART:
The S&P 500 (SPX) is mixed near-term, bullish intermediate term. SPX is in the middle of its uptrend channel and moves into this area from the low end of the channel, tend to falter most often mid-channel. If however prices break sharply higher, you figure the upper end of the channel is a possible objective in a next up leg.
1700 continues to look like tough resistance in SPX. A decisive upside penetration of 1700 that had follow through buying behind it, would suggest objectives to 1750 and above.
Near support is at 1665, extending to 1650. 1620 is next support and a key one at the up trendline. I remain cautious on staying in bullish positions here. A deeper pullback than seen to date would finally 'throw off' the prior overbought condition. And set up the next advance, etc.
S&P 100 (OEX) INDEX; DAILY CHART
The S&P 100 (OEX) chart is the same pattern as the broader 500, intermediate bullish and mixed near-term. Support has been seen on dips. OEX's chart pattern has a bearish interpretation more than not; however, 760 is a pivotal level. If OEX starts trading back above 760 objectives to 780-785 are there.
Support is at 745-740, then at 730 and the intersection of OEX's up trendline. My least likely outlook for OEX would be to see another dip to major support at 705-700. A dip TO the low end of the bullish channel yes around 730, not to below. So it looks now.
THE DOW 30 (INDU) AVERAGE; DAILY CHART:
The Dow 30 (INDU) chart is bullish but looking like a bit of a tired bull as suggested by INDU's sharp recent dip to 15400 support. A buying surge took the Average back to the line of prior highs. What next?
The line pattern like this one usually is a top forming even if only a short-term one. Buying strength will tell the story near-term. A strong move above 15600 is needed to suggest the next price swing for INDU is a thrust toward the upper end of its channel. Giving some confidence in that direction are bullish charts for Dow components BAC, BA, CSCO, CVX, DD, GE, HD, JNJ, JPM, MMM, UTX and XOM.
If instead the bull gets deflated a bit and INDU breaks below 15400, a next downside target becomes 15200 and possibly back to 15000.
NASDAQ COMPOSITE (COMP) INDEX; DAILY CHART:
The Nasdaq Composite (COMP) Index looks even more 'mixed' than the S&P. We're seeing a flat-lined sideways trend. Not enough buying juice to see a break out move above 3600 for long. I have the view that 3500 is more likely than 3700.
The recent sideways price range has been a narrow one for COMP, at 3612 on the upside, 3573 on the downside. The simplest rule of thumb is to trade next in the direction of a next breakout move above that price range either up or down.
COMP looks like it could drop a least once back into the upside gap that kicked off the last surge higher. Support is therefore suggested in the 3530 area. Next support highlighted below is seen at 3450 but buying interest/support looks to start around 3500.
NASDAQ 100 (NDX); DAILY CHART:
The Nasdaq 100 (NDX) chart is mixed/bearish short-term, bullish on a long-term basis. True, NDX surged higher Friday after working up from recent lows in the 3030 area, noted as support.
The NDX chart pattern suggests that a bearish correction may not be over if just judging by a first snap back rally. Key is to look at what happens again if NDX hits the 3090 area where we've seen a recent top. A strong advance that carries above 3090-3100 suggests that NDX has potential to 3150 next at the upper channel line.
My expectation is that a dip to 3000 is more likely than a strong move to new highs just yet.
NASDAQ 100 TRACKING STOCK (QQQ); DAILY CHART:
The Nasdaq 100 (QQQ) chart picture is mixed as is NDX of course. So, I also assess our ETF stock's pattern as one that's in a short-term bearish correction.
There's potential for QQQ to dip below 74.5-74 support ahead if this latest rally fizzles out. It didn't look that way in Friday's strong rebound. But QQQ could pull back to 72 area as a corrective low and still remain within the stock's dominant bullish trend. I doubt that the recent downside correction has run its course so figure 74 in QQQ will be more readily seen then 76.
Pivotal will what happens in the 75.7 area at recent highs. A strong move above prior highs suggest further upside potential to the 76.9-77 area, at top end of QQQ's broad uptrend channel.
RUSSELL 2000 (RUT); DAILY CHART:
The Russell 2000 (RUT) chart is mixed as RUT looks to be in correction after a very strong move higher over past weeks. I see support more coming in around 1025 than 1045. Strongest technical support is expected around 1000, extending to 980.
Near resistance is seen at 1050-1056. A move above 1056, that was more than a 1-day affair, would suggest further upside potential such as to the upper end of RUT's broad uptrend channel; technical resistance based on the intersection of this trendline is suggested around 1080.
GOOD TRADING SUCCESS!