TECHNICAL ANALYSIS
The DJIA traded lower all week and ended down 2.7% in the lower half of the weekly range. Last week was a mix of layoff announcements and political maneuvering over the US debt limit. The tech and secondary markets performed much better than the blue chips, with the Nasdaq actually eking out modest gains while the S&P closed marginally lower on the week. Sentiment, for the most part, remains neutral with the 52-week A/D line still frothy at +0.96% with Friday’s close. Again, Emerging Markets Indices have short-term bullish patterns, albeit on low volume. All eyes still seem to be on the S&P daily chart. That chart traded back under the 200-day moving average and closed below that benchmark on Friday. The 200-day starts the week at 3890 and the upper end trendline of the massive triangle pattern on the daily starts at 4025.
Dow Jones Industrial Average Hourly HLC
Dow Jones Industrial Average Weekly HLC
The DJI relieved deeply oversold hourly conditions with a rally late Friday. Support is at 33284 remains near-term critical at 33249/33240. Trade back under 33240 is a bearish signal and should test 32948 with full potential to that last major swing lows at 32600/32573. Below that is support at 32400 and 32343. A breakdown under 32343 opens counts to key short-term support of 32170. A breakdown with closes under 32170 sets up 32099 with longer-term potential toward 31727/31686. Closes under 31686 will open counts into the 30972/30960 level with support of 31423 and 31160.
CNN Fear & Greed Index
AAII Investor Sentiment Survey
Resistance is right here at 33390 and then 33471/33481. A drive above 33481 counts to pivotal near-term resistance at 33642/33645. Closes over 33645 set up 33810 and 33895/33900. A drive above 33900 should test 33393/34013 and rallies through that level count to 34342 with potential to pivotal resistance at 34395/34400. A drive above 34400 opens counts to 34589 and the December swing highs at 34712 and will open potential to a band of long-term resistance at 34879 through 34995/35000. This band at 35000 is not just a psychological benchmark but is pretty much the final area of weekly resistance before setting the DJIA up to probe the Spring 2022 tops at 35492 and the February 2022 tops at 35824. Closes over 35800/35824 would signal a test of the record highs at 36799 and 36952.
Resistance
- 33390 ***↑
- 33471/33481 *** ↑
- 33642/33645 *** ↑
- 33810 ***
- 33895/33900 *** ↑
- 33993/34013 *** ↑
- 34207 **
- 34342 *** ↑
- 34395/34400 ** ↑
- 34589 *** ↑
- 34700/34712 *** ↑
Support
- 33284 **
- 33249/33240 *** ↓
- 33146 ***
- 33013/33000 **
- 32948 ** ↓
- 32867/32850 *** ↓
- 32800 *** ↓
- 32654 **
- 32600/32573 *** ↓
S&P 500 Cash Index
As mentioned above, the S&P index closed below the 200-day moving average on Friday. The market continues to trade inside of a narrowing triangle pattern with hefty trendline resistance above. The 21-day remains above the 50-day moving average. The hourly is trading back toward overbought conditions with the sharp rally on Friday. Near-term pivotal resistance is right here at 3972/3975. Further rallies through 3975 should minimally test 3990 with counts to 4016/4025. Closes over the 4025 level should take the index to 4048 with potential toward 4100 and possibly 4155. A breakout over the 4155 level gives counts to a gap area at 4203 to 4218 and longer-term counts to critical resistance of 4311/4315.
S&P 500 Index Daily HLC
Support is at 3952 and 3939. A breakdown under 3939 suggests 3929 and then pivotal short-term support of 3918/3917. Under 3917 sets up a retest of intermediate-term support of 3890/3884. Closes under 3884 minimally should test critical short-term support of 3855/3850. Daily closes under 3850 suggest 3799/3797 with potential to 3764. Support is critical against the 3724/3720 area. Closes under 3720 open counts to 3643/3635. Under 3635 is bearish and signals a test of the lows at 3491.
Resistance
- 3972/3975 *** ↑
- 3990 *** ↑
- 4016/4025 *** ↑ (trendline)
- 4048 ***↑
- 4100 ***
- 4155 *** ↑
- 4203/4218 ***
- 4311/4315 *** ↑
Support
- 3952 **
- 3939 ***
- 3918/3917 *** ↓
- 3912/3910 *** ↓
- 3890 **
- 3890/3884 *** ↓
- 3855/3850 *** ↓
- 3815 **
- 3799/3797 *** ↓
- 3764 ***
- 3724/3720 *** ↓
- 3643/3635 *** ↓
