Technical Update 06-24-2023 DJIA & S&P500

June 24, 2023
Doug Sooley
dow jones, long term charts, stock market, stocks, technical analysis

TECHNICAL ANALYSIS

Major Indices Week of June 23, 2023

Stocks spent the entire shortened trading week lower and closed near the low end of the weekly ranges. The market is responding to a big shift in sentiment over the past three weeks. Prior to the new 2023 highs for most indices the battle was between commercials betting on the long side and speculators betting on the short side. The breakout rally early this month forced significant short-covering by the specs while commercials dumped their inventory on the short-sellers covering their losses. This has caused a significant shift on the CoT. Institutional investors have continued to pad their long positions, which can be considered a friendly reading, but after an entire year of being on the wrong side of the markets…a lot will contend on the numbers the speculators run up in the near-term. Sentiment overall remains in a greedy/bullish posture with the selloff last week and the AAII scored the third bullish sentiment week in a row. The VIX actually posted a lower weekly close as it sits at the lowest level since early 2020. Note that this Friday ends the quarter and marks a key timing point on June 30^th, where there is potential for increased volatility and fast moves. The Dow closed the week down -1.64%, The S&P was down -1.39%. The Nasdaq ended the week down -1.41%, the high-flying FANG settled down -1.20% and the Russell, which had been on a tear, dropped a sharp -4.75%.

Timing Points

06/30 *** fast moves
07/10 **

CNN Fear & Greed Index

AAII Investor Sentiment Survey

Dow Jones Industrial Average Hourly HLC

The Dow hourly is oversold but cleared a significant swing low on Friday against the low on 14 June 2023 at 33783. Prices are sitting above support of 33567 and it back under the breakout area of the large inverted head & shoulders pattern. Support for the Dow is at 33567 and further declines under this support have potential to pivotal short-term support of 33351/33340. Daily closes under 33340 open counts to 33009 with potential to critical near-term support of 32636/32620. Closes under 32620 will count to 32219/32175. A breakdown under 32175 sets up a test of intermediate support in the 31727/31686 level. A breakdown with closes under 31686 will open counts into the 30972/30960 level with support of 31429/31423 and 31160. There is a gap on the daily chart that runs from 31160 to 31119.

The weekly Is overbought. Resistance is at 34006, 34117 and 34228/34233. Rallies with closes over 34233 can test 34342 and closes over 34342 setup a drive toward the weekly highs at 34712. A drive over 34712 can test significant long-term resistance at 34879 and 34995 and offers full counts back critical resistance at 35492. Closes over 35492 will open counts to 35824. Closes over 35492 should minimally test a gap area on the daily at 35996 to 36044. A reminder that holding the breakout of the H&S pattern counts to long-term targets at 37095.

Dow Jones Industrial Average Weekly HLC

Resistance

33868 **
34006 **
34117 ***
34228/34233 *** ↑
34342 *** ↑
34395 **
34495 **
34595 **
34712 *** ↑
34879 ***
34995 *** ↑
35112 **
35225 **
35372 ***
35492 *** ↑
35800/35824 *** ↑
35996 ***
36044 *** ↑

Support

33646 **
33567 *** ↓
33381 **
33251/33340 *** ↓
33261 **
33195 **
330009/33000 *** ↓
32843 ***
32636/33620 ***
32500 **
32396 **
32319/32175 *** ↓
31950 **
31828/31805 *** ↓
31624 ***
31530 **
31429/31423 *** ↓

S&P 500 Cash Index

The S&P hourly is oversold and flashing a preliminary bullish divergence on the stochastics. Support is 4337 and 4295/4290. A breakdown under 4290 opens counts to 4248 with potential to pivotal short-term support of 4204/4200. Daily closes below 4200 open counts to 4128 with potential to critical near-term support at 4053/4050. Under 4050 sets up a move to 3970 with a shot at critical daily support of 3857/3850. A breakdown with closes under 3850 opens counts to support against the 3691/3680 level. Under 3680 sets up a move to 3657 and full potential back to critical long-term support of 3505/3491.

Resistance is 4366, 4382, 4395 and 4407/4410. Closes back over 4410 should carry the cash index toward long-term critical resistance of 4486/4505. Closes over 4505 can carry to 4593 with full potential toward 4637. A breakout above 4637 opens potential toward 4748 and ultimately 4818. Above the record highs opens counts to 4952/5000.

S&P 500 Index Weekly HLC