DOW Friday closing price - 15973

The DOW made a new 24-month low weekly close on Friday but the bulls once again were able to generate a rally off of the lows of the week and close in the upper half of the week's trading range and above the 200-week MA, currently at 15820, to suggest that the negative momentum is waning and that further downside will require additional negative news.

On a negative note though, the DOW is now showing a total of 5 weekly closes in the vicinity of the 16000 level (16065, 16026, 16102, 15988 and Friday's close at 15973) to suggest that further downside, at least on a weekly closing basis, will ultimately be seen as so many multiple lows are likely to be broken.

To the downside and on an intra-week basis, the DOW shows very minor support at 15942 and minor at 15855. Below that, there is decent to possibly strong support between 15340 and 15503.

To the upside and on an intra-week basis, the DOW shows minor resistance between 16201 and 16235 and minor to decent but likely short-term pivotal between 16510 and 16591.

The rally on Friday in the DOW was based mostly on oil prices rallying $3 from the lows as well as a little bit on Retail Sales coming in a bit better than anticipated. In addition, traders are not yet all that worried about a recession and/or the market crashing, meaning that strong dips automatically generate new buying interest, especially when some of the outside factors (such as oil prices) show signs of turning around.

By the same token, the DOW has now built a chart scenario of multiple lows, both on the intra-week and weekly closing chart, that will continue to be a magnet for breaking unless the fundamental factors (such as oil and the Asian markets) change dramatically for the better and quickly.

In 2011, when the DOW last tested the 200-week MA and generated a similar correction, the index spent a total of 9 weeks trading around the line before the uptrend resumed. The index is now into the 5th week since the line was first tested and based on last week's rally and high probabilities of the rally continuing this week, it does suggest that more backing and filling will be seen for at least another 2 to perhaps 4 weeks, given that the probabilities do not favor the recent intra-week lows being broken this coming week.

The keys for the week in the DOW are very simple. If the index gets above last week's high at 16201 (likely) an attempt to get above the recent high at 16510 will ensue (whether it be this coming week or the next), which in turn would suggest a new short-term rally up to test the 17000 level would be attempted if the bulls can get above the December 2013 high at 16588. Any failure to get above 16510/16588 would likely bring back the selling interest in a strong way, given the magnet that the multiple lows offers.

The probabilities favor the DOW getting above 16210 this coming week but not above 16501 and then closing in the bottom half of the week's trading range, meaning that the following week a new attempt at the lows would be made. Such an event would extend the present backing and filling scenario for another couple of weeks. Nonetheless, it does need to be mentioned that if the bulls are unable to get above 16201 in the first couple of days of the week, the selling interest will likely resume before the end of the week and new lows likely made this coming week, both on an intra-week and weekly closing basis.

NASDAQ Friday closing price - 4337

The NASDAQ generated a new 16-month intra-week and weekly closing low on Friday but the bulls were able to rally the index to close near the highs of the week, suggesting that further upside above last week's high at 4369 will be seen this week. With the index having broken the August and January lows it can now be said that the chart expectations have been fulfilled. Nonetheless, the bulls still need to do more before it can be said that the downside is over.

The NASDAQ closed on Friday at a level that may have some pivotal meaning, inasmuch as an important-at-the-time high weekly close seen in March 2014 was at 4336 and another somewhat minor but also at-the-time important low weekly close seen in July 2014 was 4352, meaning that if the bulls are able to generate a green weekly close next Friday, that the close this past Friday at 4337 will take added importance as a potential low for not only several weeks but perhaps the whole year.

By the same token, the failure to generate a positive reversal in the NASDAQ on Friday, leaves the door wide open for this coming week being just a short pause in the recent downtrend and that the 200-week MA, currently at 4060, will continue to beckon.

To the upside and on an intra-week basis, the NASDAQ shows minor but short-term pivotal resistance at last week's high at 4369. Above that level, there is no resistance whatsoever until 4545/4550, which does include the 200 60-minute MA. On a daily closing basis though, the 4468/4471 has some pivotal meaning as it would negate the recent fall and would suggest that the recent low at 4209 is a bottom.

To the downside and on an intra-week basis, the NASDAQ shows minor to perhaps decent support at the previous 2 lows at 4292 and 4313 and then minor at last week's low at 4209. Further and decent intra-week support is found at 4116 and then at the 200-week MA, currently at 4060, which is weekly close support.

The key for the "week" in the NASDAQ is 4369 as a break of that level would likely generate automatic chart buying for a rally up to the 4470-4550 level. The key after that would be 4485 on a weekly closing basis as a close above that level would give further support to the idea that a bottom is now in place. A weekly close above 4635 would be a buy signal on the weekly chart and confirm that a bottom has been made.

To the downside, it is evident that if the bulls in the NASDAQ fail to rally above 4369 on Monday or even Tuesday that the sell interest will likely return in full force with 4169 the target for the week.

There has not yet been enough chart action to the upside in the NASDAQ to give the bulls anything more than a slight edge for the week.

SPX Friday closing price - 1864

The SPX made a new 2-year intra-week low and a new 22 months weekly closing low this past week, keeping the recent downtrend intact. Nonetheless, buying interest continues to be found in the low 1800's as the index has been down between 1810 and 1820 on 4 occasions over the past 22-months and on each occasion a rally has occurred.

The SPX rallied on Friday and closed near the highs of the week, suggesting further upside above last week's high at 1881 will be seen this week. By the same token, the red weekly close did confirm the break of the double low on the weekly closing chart (at 1880/1886) and that is a negative that likely will require some positive fundamental change to occur before it is negated. Simply stated, the bulls did not accomplish enough on Friday for the traders to say with any confidence that a bottom in in place.

The SPX now shows multiple intra-week lows (4) between 1810 and 1820 that suggests that further downside is still likely to be seen, even if the bulls are able to generate a small rally/pause this coming week. By the same token, it is evident that the traders are not presently fearing that the long-term trend is in jeopardy of being broken, as each time the index has approached the 200-week MA, currently at 1790, an indicative bounce has occurred. What this action suggests is that the fundamental picture still needs to worsen in order for much further downside to occur, other than the technical engineering/fulfilling of chart objectives.

To the upside and on an intra-week basis, the SPX shows minor but short-term pivotal resistance at last week's high at 1881. Above that level, there is very minor resistance at 1908, minor at 1927 and minor to perhaps decent, as well as likely pivotal resistance at 1947.

To the downside and on an intra-week basis, the SPX shows decent support between 1810 and 1820. Below that level, there is very minor support at 1767 and minor at 1737. On a weekly closing basis though, support is decent between 1775 and 1790, which does include the long term important 200-week MA.

The SPX is likely seeing a small pause in the downside selling pressure due to the rally seen in oil prices on Friday. Nonetheless, chart-wise the bulls have not yet accomplished anything of consequence to suggest that the downside is over, especially given that a multiple low scenario has been built and that the 200-week MA has not yet been visited, which has to be considered a magnet at this time since the bears have been able to get it so close (within 20 points) without it being touched.

The probabilities favor the bulls in the SPX this week but only for a small short-covering rally/pause.

It was expected that the indexes would have another strong negative week and close near the lows of week, as well as test the 200-week MA's, and then generate a reversal the following week that would suggest a bottom for the year had been made. Nonetheless, the unexpected rally in the oil market on Friday made that chart scenario go askew, suggesting the traders now have to wait for further clarification in the oil market (as to whether new lows are possible or the bottom of the down slide has been found) before any decisions are made.

With oil prices likely to generate "some" additional recovery at the beginning of the week and the FOMC minutes from the last meeting being released on Wednesday, the probabilities favor the indexes trading sideways to perhaps with a slight upward bias for the first 2 days of the week. Overall though, the recent bear trend remains in place.