THE BOTTOM LINE:
The broad S&P 500 (SPX) closed over 2000, the S&P 100 (OEX) went to slight new highs and the Dow 30 (INDU) stalled at a line of prior resistance around 17130. The Nasdaq Composite and the big cap Nas 100 (NDX) were up too but saw slowing upside momentum as they get slightly overbought. Small is still not 'beautiful' with the Russell 2000 (RUT).
The trend picture, support and resistance and price objectives are seen in my index commentaries below. I will do my month end chart/technical review in my related Trader's Corner piece tomorrow (Sunday).
Things to Like: the Market continues higher. DON'T give up a position in the Indices just because we tick past May. Unlike passing 'go' in Monopoly, you won't collect anything by not being in a still continuing uptrend no matter what the season. Even the less than stellar Dow 30 (INDU), from its 16368 reaction low early this month up to INDU's Friday 17098 Close, saw a trading swing of 730 points, up 4.5%
Other Things I Like: Labor day weekend will be over soon so I can go out ON the road again along the Pacific Coast and not be in tourist traffic jams!
MAJOR STOCK INDEX TECHNICAL COMMENTARIES
S&P 500 (SPX) DAILY CHART:
The S&P 500 (SPX) Index continues bullish and the latest news is SPX has gone over a big milestone: 2000. A kind of big deal technically.
SPX is now up 29% from its massive 2000 and 2007 double top in the 1550 area. And, up 300% from its 667 March 2009 low!!
Next resistance looks to come in around 2020-2040 per my highlights on the daily chart below. Technical/chart support comes in at 1980, extending to 1950.
SPX volatility as measured by VIX is still quite low of course. Some traders like low volatility (I'm one) especially when taking outright positions in calls/puts; options' sellers don't like a low VIX so much. One thing we can be reasonably sure of, VIX, like the fall weather, will change.
Bullishness, in terms of my 'sentiment' indicator, moderated a bit this past week, which in turn keeps the uptrend on track in my estimation. The market is nearing an overbought condition but not drastically so; well, except on a very long-term (monthly) chart basis but that could go on well into 2015.
S&P 100 (OEX) INDEX; DAILY CHART
The S&P 100 (OEX) is no longer stalled at its prior top and while OEX hasn't gone on to substantial new highs, the Index IS holding above its prior peak levels fulfilling a tendency for prior highs, once exceeded, to 'become' subsequent support. Stay tuned on that!
Next resistance is projected at 890 and as you would likely suspect, at 900 after that, another milestone level; not quite like 2000 in SPX is, the equivalent in OEX being 1000, which we may see next in coming months.
Very near support is at 886, which was the prior top; next support is 880, then back at the 21-day moving average (at 871 currently).
OEX has hit an overbought extreme based on the 13-day Relative Strength Index. Pullbacks to at or near the 21-day average be bought again, not risking to too far below this key trading average, looking for a move to the 900 area and higher.
THE DOW 30 (INDU) AVERAGE; DAILY CHART:
The Dow 30 Average (INDU) is hitting resistance in the 17130 area, but isn't backing off from there much, suggesting potential for INDU to pierce this level. If so, next resistance then looks like it comes around 17250.
Near support is now up to 17000 even, with next lower chart support at 16900.
INDU stocks that look capable of working still higher, OR continuing ongoing rallies, are the following 19: AXP, CAT, CSCO, CVX, DD, DIS, GS, HD, INTC, JNJ, JPM, KO, MMM, MRK, MSFT, PFE, TRV, UNH, and XOM.
Based on what I see with the 30 various Dow charts, INDU looks to be capable of going to new highs within its broad long-term uptrend price channel. Stay tuned!
NASDAQ COMPOSITE (COMP) INDEX; DAILY CHART:
The Nasdaq Composite Index (COMP) remains bullish in its pattern. COMP has slowed its rate of increase but volume has been relatively low in the waning summer. The pattern is bullish regardless, as weekly lows were above the prior week's highs for the most part.
I still peg key support in the 4500-4485 area. (Very near support is closer to 4550 however.) Next lower intermediate support is seen at 4400, which is just above COMP's up trendline.
Technical resistance is seen in the 4600 area, then up at the upper channel line, currently intersecting in the 4670 area.
COMP is still in the high-end RSI (13-day Relative Strength Index) zone that suggests a short to intermediate overbought condition.
Bullish sentiment has moderated some in the past week, which is a mild bullish plus in contrarian sense. Bullishness in terms of my equities call to put daily volume ratio line hasn't shot up to what I consider to be another type of 'overbought' extreme as prices have continued higher. There's some trader caution in what happens next with the economy, which tends to set the stage for the rally to continue more than not.
NASDAQ 100 (NDX); DAILY CHART:
The Nasdaq 100 (NDX) chart remains bullish. The only cautionary note to a continued strong advance is suggested by the Index having hit (again) the top end of its bullish uptrend price channel. What tends to happen with this pattern is that the advance SLOWS down.
This isn't to say that the NDX rally won't continue but this pattern, PLUS an overbought 13-day RSI can result in sluggish further gains and perhaps another dip such as seen from late-July into early-August. I'd also note that this wasn't a huge pullback as prices found support near the middle of the NDX's price channel. A strong uptrend will often see dips to around the channel mid-point, rather than to the LOW (support) end of the channel; i.e., at the up trendline.
Near NDX support is highlighted in the 4050 area, then back at the milestone 4000 level. I anticipate significant support/buying interest at 4000 and at the close by 21-day moving average.
Near resistance is at the upper channel line, currently intersecting at 4100, with the 100 increment levels being minor milestone areas where the bulls will see if they can push it up and through and the bears/profit takers push back and down.
Implied Nas 100 volatility (VXN) remains low, possibly suggesting some bullish complacency and perhaps more of a propensity for a corrective pullback ahead than a new up leg.
NASDAQ 100 TRACKING STOCK (QQQ); DAILY CHART:
The Nasdaq 100 tracking stock (QQQ) is bullish. The way the channel line gets drawn with the Q's, there's a suggestion of a little more upside than the underlying index, before this ETF hits resistance in the 100.9 to 101.5 zone.
Near support now is bumped up to 99, with next support suggested in the 98 even area. Support implied by the 21-day moving average comes in at 96.9 currently.
Daily trading volume continues to be quite low, which isn't atypical for QQQ. If this was a company stock chart, I would see a rally on less and less volume as a bearish divergence. With QQQ its sort of business as usual.
The On Balance Volume (OBV) line has leveled off, which doesn't fill me with great bullish confidence for a next leg higher but we should better see what's what when we have more market participation after the 3-day weekend. 100 is a big 'milestone' number and traders may take a wait and see attitude as to whether 100 gets pierced or not, at least straight away.
RUSSELL 2000 (RUT); DAILY CHART:
The Russell 2000 (RUT) chart is now more or less at a pivotal 'technical' chart juncture. RUT has retraced just over a Fibonacci 62 percent of its prior downswing, which may be as much as a push higher as it can manage for now. Moreover, a down trendline can start to be drawn (with 3 highs to start it) as seen on the daily RUT chart below.
I've pegged initial resistance at 1175, at this hypothetical resistance trendline. Above 1175, next resistance looks to come in the 1186 area.
Support is seen in the 1160=1158 area, at the 50-day moving average, with potential support then extending to 1150.
RUT touched an overbought level as suggested by the 13-day Relative Strength Index or RSI and then stalled a bit. This may suggest that the Index will next trend sideways to lower in order to 'throw off' its overbought extreme.
GOOD TRADING SUCCESS!