Financial Sense   Home  l  Market Monitor  l  Market WrapUp  l  Storm Watch  l  About Us  l  Contact Us

WEEKLY CHARTS

DJIA: Support at 10500 and at 10350. Resistance at 10725 and at 11000.

DJTI: Support at 3500 and at 3350. Resistance at 3900.

SP500: Support at 1200. Resistance at 1245 and at 1260.

NASDAQ: Support at 2120. Resistance at 2220.

HUI: Triple resistance at 240; support at 225, and at 210.

OIL:  Resistance at $72.50; support at $62.5 and at $57.50.

Notice that the T.O.s continued lower on Friday, while the indices turned up. It implies that we ought to expect   weakness during the first couple days of this week, and perhaps for the entire week.

The trend is UP for NASDAQ.

The trend is UP for the SP.

SUMMARY

Last week we said, "The indices have come up to resistance while the Quantifiers have rallied back up to the zero line. The set up implies that, strictly from a technical point of view, the odds favoring a break-out are almost even with the odds favoring a downside reversal. The VXO (see chart below) is hinting that we need to be more concerned about a downside reversal due to the identical set-up between now and early April (see chart below) which resulted in a 5% decline. Next week we have options expiration, and usually, options expiration weeks tend to have a positive bias. In addition, the price pattern associated with a positive options expiration week is characterized by weakness on Monday and Tuesday, followed by strength Wednesday through Friday. Therefore, early on we will be looking for confirmation that the week will turn out to be a typical options expiration one. If we have weakness on Monday and Tuesday but price is contained above support, we will expect the rally to resume by Wednesday and last until Friday. On the other hand, if the indices rally on Monday and Tuesday, it would imply that we are dealing with an "atypical" options expiration week, and thus, we will re-evaluate as we go, based on the technical readings that are associated with the rally."

(Current) Last Friday we got the "customary" options expiration rally, and given that most indicators were flirting with the zero line, the odds slightly favored a continuation for another 1-2 days. If the markets had been able to continue higher yesterday and today then the rally would have accelerated by Wednesday, and in the case of the SP for example, it would have climbed to new recovery highs in the 1265-1285 zone. Unfortunately, the markets were unable to continue higher during the first couple of days of this week, and at the same time, the McClellan Oscillators and the Quantifiers reversed to the downside at the zero line. In addition, the BSEs and the TOs also turned negative! Consequently, the odds at this point, favor additional price weakness.

Ike Iossif

Home  l  Broadcast  l  Market Monitor  l  Storm Watch  l  Sitemap  l  About Us  l  Contact Us