TECHNICAL ANALYSIS
Major Indices Week of July 28, 2023
The Dow traded to the highest levels since early 2022 and closed at the highest weekly close since 31 January 2022. The S&P closed at the highest weekly close since 10 January 2022 and the highest daily close since 04 April 2022. On Wednesday of the week, the Dow closed higher for the 13th session in a row…the longest such streak since 1987 and one of only five such streaks since 1897. The close on the 26th was the highest daily close for the Dow since 09 February 2022. Thursday’s cycle timing stopped the record streak of higher closes with large reversals in all the markets. It is important to note that the CRITICAL timing of July 20/21 still marks the top of the FAANG and Nasdaq markets, making those areas critical to the overall trends. The next critical timing point is August 22/23. This Friday marks minor timing.
Sentiment remains at frothy/greedy levels with the AAII Sentiment Index hitting a friendly reading for the eighth week in a row. The VIX set the lowest weekly close since 13 January 2020 at the bottom of an outside week down. The S&P daily is currently working off overbought conditions as it holds gaps into the new highs. The Dow daily is in overbought territory and the Dow hourly chart is neutral as it reacts to some recent bearish divergences with the new intraday highs on Thursday. The Dow closed the week up +2.78%. The S&P was up +1.63%. The Nasdaq ended the week up +2.02%, the FANG settled up sharply +3.26% and the Russell was up +1.01%. The Commitment of Traders CoT has stayed pretty much the same with past few weeks of rallies. Commercials have ceased their liquidation and managed funds have basically completed their short-covering. Institutional investors continue to add to long positions on the rally.
Timing Points
- 08/04 **
- 08/09 **
- 08/15 ***
- 08-22/23 *** X Key
CNN Fear & Greed Index
AAII Investor Sentiment Survey
Dow Jones Industrial Average Hourly HLC
The Dow hourly is reacting to some initial bearish divergences registered with the new trading highs last week. Prices tested and closed just under resistance at 35492. Further rallies with closes over 35492 will open counts to 35824 with longer-term counts into a gap area on the daily at 35996 to 36044. A breakout over 36044 sets up the 36513 area with potential to test the all-time record highs at 36952. A reminder that the inverted H&S pattern in the DJIA counts toward long-term targets at 37095.
Support for the Dow is at 35165 and short-term pivotal at 34867/34865. A breakdown with closes under 34865 opens counts to 34627 with potential to short-term critical support of 34387/34380. Daily closes under 34380 open counts to major short-term support in the 34119 through 34090 area. Closes under 34090 can test 33996 with counts to critical intermediate-term support of 32977/32970. Closes below 32970 suggest a move to 32153 with potential to 31328/31320.
Dow Jones Industrial Average Weekly HLC
Resistance
- 35492 *** ↑
- 35645 ***
- 35800/35824 *** ↑
- 35996 ***
- 36044 *** ↑
- 36271 **
- 36390 **
- 36513 ***↑
- 36636 **
- 36934/36952 *** ↑
- 37095/37096 *** ↑
Support
- 35355 **
- 35165 ***
- 34999 **
- 34867/34865 *** ↓
- 34770 **
- 34630/34627 *** ↓
- 34490 **
- 34387/34380 *** ↓
- 34119 *** ↓
- 34090 **
- 33996 **
- 33865 **
S&P 500 Cash Index
The S&P hourly is neutral with prices reaching a key target at 4593 and closing just under that level. Continued rallies with closes above 4593 should test 4637. A breakout with closes above 4637 opens potential toward 4748 and ultimately 4818. Above the record highs opens counts to 4952/5000 with potential to 5144.
S&P 500 Index Weekly HLC
Support is 4541 and 4500/4499. A breakdown under 4499 sets up a test of 4467 with counts to pivotal near-term support 4434/4430. Daily closes under 4430 set up a move to 4180/4177. Closes under 4177 open counts to 4049 and critical short-term support of 3917/3910. Daily closes below 3910 open counts to 3754/3750 with potential to support at 3503/3491.
Resistance
- 4593 *** ↑
- 4607 **
- 4637 *** ↑
- 4665 **
- 4748 *** ↑
- 4818 *** ↑
- 4952 ***↑
- 5000 *** ↑
- 5072 **
- 5144 *** ↑
Support
- 4541 **
- 4500/4499 *** ↓
- 4467 ***
- 4434/4430 *** ↓
- 4405 ***
- 4280 **
- 4180/4177 *** ↓
- 4040 ***
- 3917/3910 *** ↓
- 3875 **
- 3754/3750 *** ↓
