THE BOTTOM LINE:
The Dow 30 (INDU) looks quite bullish as its weekly chart formation, that of a sideways May to November rectangle, projects a 'minimum' next upside target to the 16600 area given INDU's decisive upside penetration in early-November above its line of highs at 15680. I show this rectangle pattern and subsequent bullish 'breakout' on INDU's weekly chart in my Trader's Corner column of Friday, 11/22/13 which can be seen online HERE
The other major indexes, such as the S&P 500 (SPX) and 100 (OEX) will run into some technical resistance as implied by the top end of their uptrend channels at just modestly higher levels as will be seen in my major index commentaries below.
The Nasdaq Composite (COMP), as I've been saying for awhile, looks to be facing tough resistance just overhead at 4000. COMP has been basically in a sideways 'holding' pattern since hitting resistance implied by the top end of its broad weekly chart uptrend price channel over the past 5 weeks. See COMP's weekly uptrend price channel highlighted at the aforementioned LINK to yesterday's (11/22) Trader's Corner article.
There is usually ONE of the major indexes that 'projects' a further major move higher (or lower) in this case INDU, which in turn suggests how high or low the overall market could get on a next major price swing; just as in a big bull move like this one, there is sometimes ONE of the major indexes (e.g., COMP) that suggests an area of key resistance in the current trend, whether just a temporary pause or not.
MAJOR STOCK INDEX TECHNICAL COMMENTARIES
S&P 500 (SPX); DAILY CHART:
The S&P 500 (SPX) chart continues in a bullish pattern as the Index had a bullish end of the week Close above key near resistance at 1800. Next and possibly the most pivotal technical resistance is implied at the top end of SPX uptrend price channel highlighted below, with this line currently intersecting in the 1820 area. I don't currently have a higher upside projected target above 1830 on near-term basis.
On a monthly chart basis (not shown) SPX continues to point to a very bullish long-term bull market as the Index continues to move higher above resistance zone of 1535-1570 implied by its September 2000 and October 2007 tops.
Near support is seen at 1775, extending to 1750. More on key technical indicators BELOW the SPX daily chart.
SPX continues in overbought territory again as seen above. Bullish sentiment hit a high extreme on this past Thursday and the Relative Strength Index (RSI) indicator continues to trade in its 'overbought' zone. These technical indicators don't suggest a top the way, for example, a key downside price reversal would, but do suggest that the risk of a correction is above average.
The other 'risk' is that I cry 'wolf' over these things too much as overbought conditions are part of almost all MAJOR bull moves and can go on for an extended period. Of course, there is always, eventually, a correction even if only a sideways time correction; i.e., a sideways move (versus much of a downside pullback) that 'throws off' such high extremes in key technical indicators.
S&P 100 (OEX) INDEX; DAILY CHART
The S&P 100 (OEX) chart has seen another bullish surge higher with Friday's strong upside move that took OEX to a Close well over prior intraday highs. Currently, OEX is nearing some technical resistance in the 812 area as implied by the TOP end its broad uptrend price channel. I have no current higher projections on a technical/chart basis, based on either the daily or longer-term charts.
The foregoing is of course not to say that OEX can't or won't get to the 820-825 area and equal a move duplicating the last upside spurt higher. I tend to rely on such upper channel boundaries to suggest where an index may correct or SLOW its upside momentum. Stay tuned on this as we're in a very strong bull market.
Near support is seen at 790, then at 780. A Close below 780 would suggest further downside potential. Major support comes in around 765 currently.
THE DOW 30 (INDU) AVERAGE; DAILY CHART:
The Dow 30 (INDU) has climbed to above key resistance at 16000 and could be headed to the 16200 area next and possibly to the 16600 area longer-term. INDU, because of its multimonth sideways move from May into early-November has a different looking chart than the S&P.
INDU's upside potential now projects significantly higher than the much broader S&P indices given continued longer-term bullish upside momentum in INDU stocks AXP, BA (but paused in its upside momentum) DD, DIS, GE, HD, now INTC, JNJ, now JPM!, MMM, MSFT, NKE, PFE, PG, TRV and V and a resurgent WMT and XOM (18 stocks, more than half of the Dow 30).
Near-term support is seen in the 15800 area, then at 15600; major support is suggested around 15400.
There's no 'technical' reason why the Dow won't continue to work higher based on CURRENT upside momentum. INDU isn't even quite as overbought in terms of the 13-day RSI as it 'typically' gets at price peaks. The Dow is starting to get well over its 21-day average but wouldn't be really 'extended' on the upside (relative to this key trading average) until around 16300 where INDU would be 3 percent above its 21-day moving average.
NASDAQ COMPOSITE (COMP) INDEX; DAILY CHART:
The Nasdaq Composite (COMP) Index remains in sideways type holding pattern but has made a slight new Closing high relative it its prior trading range. COMP is now within a hair's breath of climbing above key resistance at 4000. Resistance implied by the upper end of COMP's broad uptrend price channel intersects currently in the 4027 area with next higher resistance estimated for the 4100 area.
Near support is highlighted at 3900, extending to 3860.
Bullishness is on the rise recently, as seen in my 'CPRATIO' indicator at the bottom of the daily COMP chart. Bullish sentiment has occasionally gotten extreme on a daily basis but only got fairly 'extreme' on a 5-day moving average basis the last time COMP got to the top end of its uptrend channel. It's of course still a strong overall bull market but COMP's chart pattern may suggest that the tech-heavy Nasdaq may act as a drag to the overall market in the near-term. Stay tuned on whether COMP breaks out above the upper channel line (at 4027-4030)!
I don't currently see a strong likelihood of COMP climbing above the 4000 level on a weekly Closing basis.
NASDAQ 100 (NDX); DAILY CHART:
The Nasdaq 100 (NDX) chart remains bullish although it hasn't gone to a new closing high yet but could be headed there if the coming week opens strong. 3429 is the recent intraday high that needs to be overcome. Next higher resistance is suggested at the upper channel line, currently intersecting in the 3476 area. 3500 is my current upper end target for NDX.
Technical support is highlighted in the 3350 area, extending to around 3500.
We could be nearing the end of this run in the big cap tech stock NDX Index but the rest of the market has been pretty strong. Not strong enough I think to propel NDX above 3475-3500 anytime soon, especially not on a weekly Closing basis in my current estimation.
NASDAQ 100 TRACKING STOCK (QQQ); DAILY CHART:
The Nasdaq 100 (QQQ) tracking stock is bullish but has stalled some below 84 near resistance at the prior recent intraday price peak. Next technical resistance is projected in the 85 area.
I don't currently have upside price targets above 85. There's a well-defined long-term uptrend channel that intersects currently in the 85 area. This isn't to say that this ETF won't climb still higher above 85 but NDX hasn't cleared prior highs yet of course and can't be said to be in a major new UP leg although some key Nasdaq stocks remain in strong uptrends; e.g., GOOG and (to some extent) AMZN. AAPL is stalled recently although the stock still looks quite bullish on a longer-term basis.
Near support in QQQ is at 82-81.4, with next support at 80.8.
The On Balance Volume (OBV) line has dipped recently, which suggests caution on the buy side as daily trading volume has stalled. Normally, we don't see QQQ volume spikes unless there's a break below perceived chart support, as would likely be the case if QQQ broke below 82 and lower, such as to under 81.4 currently.
RUSSELL 2000 (RUT); DAILY CHART:
The Russell 2000 (RUT) chart is no longer 'mixed' in that RUT has managed at least one Close over its prior intraday (1123) high. RUT could be headed to the 1140 area next and possibly to the 1160 area over time. The Russell is bullish above 1120, not so much below this level.
Near support is seen at 1100-1096, then at the low end of its uptrend price channel in the 1080 area.
RUT is performing well given its tendency to move in tandem with Nasdaq, which is lagging some relative to the S&P and Dow. The Russell 2000 also typically has some seasonal type strength in the first quarter of the new year and this recent rally may be 'early' in that sense but a move above prior resistance is worth watching for what comes next.
GOOD TRADING SUCCESS!