Quick Current Weekly Glance at Dow, NAS, and SP500

Aug 17, 2009: 12:56 PM CST

With the broad markets at critical potential turning points, let’s take a quick fly-by view of the weekly structure (showing the entirety of the Bear Market so far) of the Dow Jones, NASDAQ, and S&P 500.

Dow Jones Index Weekly:

The Dow Jones is inflecting downwards (retracing) off the critical expected resistance zone of the 9,450 level, which reflects the 38.2% Fibonacci level of the ‘entire’ Bear Market as shown.

Price is also at the upper Bollinger Band, signaling an overbought condition.

A clean and crystal clear negative volume divergence has set-in as price stair-stepped its way higher through overhead resistance levels since bottoming in March 2009.

It would be a major accomplishment for bulls to break above the 9,500 resistance level, so until that happens, keep your eyes set on downside targets, including the 50 and 20 week EMAs as shown above, if not the 8,000 level for a retest of prior price support… if not beyond.

NASDAQ:

The NASDAQ Index – as is usually the case – has shown relative strength on the recent rally off the March lows, rallying 60% off the 1,300 level.

The NASDAQ broke through the 38.2% Fibonacci level (the grid above is inverted), but is failing (struggling) just beneath the 50% Fibonacci level at 2,070.

Along with the Dow, price is (was) at the upper level of the weekly Bollinger Bands, and two dojis formed on the last two candles (weekly bars) prior to this morning’s downside opening.

If the technical picture above holds out (meaning bulls don’t pick up the pace yet again here), we should expect a minimum move down to test the EMA confluence support at 1,800.

Finally, the S&P 500:

Like the Dow Jones, the S&P 500 is failing to overcome critical resistance at the 1,014 level which reflects the 38.2% Fibonacci zone of the entire Bear Market so far.

Along with being at the upper boundary of the Bollinger Bands, price formed a doji candle last week and now price is inflected down as anticipated.  Keep your eye on lower support levels via weekly EMAs, and target a potential retracement to the 900 level should price continue its retracement.

Though generally volume has declined during the rally off the March lows, the S&P 500 actually saw a relative ‘pick-up’ in volume in July as shown above.  That’s an interesting development.

Watch overhead resistance levels in the market and keep these structures in mind when setting up lower timeframe trades.  Manage risk, and try not to get overly bearish – bulls have shown amazing resiliency, so keep that in mind when analyzing charts from a technical purism approach.

Remember we have the “Weekly Intermarket Technical Report” available for subscription to keep you ahead of the curve when it comes to short and intermediate term trading opportunities and levels to watch in key related markets, including the S&P 500 in much more detail than described above.

Corey Rosenbloom, CMT

4 Comments

4 Responses to “Quick Current Weekly Glance at Dow, NAS, and SP500”

  1. TickerStreet Says:

    Corey, Look at the $NDX for similar retracements. NDX [and not the COMPX] has the 38.2% retracement like the SPX and DJI.

    Yesterday evening, I posted the global markets' retracements before ASX and NIKKEI opened on my blog.

  2. Mikkel Says:

    But if you look on the SPY chart here you can clearly see the volumen is falling from the lows in marts until august !

  3. Bob Says:

    Interesting to note the leadership in the NASDAQ; it is the only index to reach the 50% retracement level… technology is truly resilient. I guess it emphasizes just how much of a positive impact it has on our daily lives.

    With the other indexes only achieving a 38.2% retracement, it speaks to the overall weakness of this rebound. If this is a topping point, it is a relatively bearish signal.

  4. Bob Says:

    Interesting to note the leadership in the NASDAQ; it is the only index to reach the 50% retracement level… technology is truly resilient. I guess it emphasizes just how much of a positive impact it has on our daily lives.

    With the other indexes only achieving a 38.2% retracement, it speaks to the overall weakness of this rebound. If this is a topping point, it is a relatively bearish signal.