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WEEKLY CHARTS

DJIA: Weekly support at 10650 and 10200. Resistance at 10900 and at 11300.

DJTI: Weekly support at 4400. Resistance at 4800 and 5000.

SP500: Weekly support at 1219 and 1160. Resistance at 1265 and at 1280.

NASDAQ: Weekly resistance at 2100 and 2200. Support at 2010 and 1890.

HUI: Weekly support at 260. Resistance at 360.

OIL: Weekly resistance at $83 and $90. Support at $75.00 and $72.50.

The TOs are declining, which means it is quite possible to have one more day of downside action. However, the positive divergence suggests that if the index continues to decline for another trading day, then it ought to reach--at least--a short term bottom.

The trend is DOWN for NASDAQ.

The trend is DOWN for the SP.

Last week we said, "Both the McClellan Oscillators, and the Quantifiers suggest that last week's action ought not to be interpreted too bearishly, unless there is a clear close below support. Moreover, the current pattern indicates that the two most possible scenarios going forward are the two shown below. Notice that in either case we ought to get another attempt to the upside before a bearish or bullish resolution takes place. Is it possible for the markets to go straight down from here? EVERYTHING IS POSSIBLE, but at this point such action is not very probable, unless something exogenous happens. Thus, for the time being we are looking for a rally towards the highs of last week, and we'll re-evaluate once the markets get there."

Last week, exogenous events in three different fronts involving Iran, North Korea, and Israel/Lebanon did take place, the indices did close below support, and thus, the least probable scenario--from a purely technical point of view--came to fruition! Going into next week, we have the EXACT same situation; the technicals suggest that a short-term bottom ought to be at hand, but the geopolitical tensions remain high. Consequently, all "technical" bets are off at this point. If the conflict in the Middle-East widens with Syria and Iran getting into it, it doesn't matter what the technicals say, oil is going above $90, and the indices are going to the first downside targets, and more likely, to the second ones (see table below). Please read additional comments below. Also please read Uranium, Gold, and America's march towards fascism.

Notice the pattern similarity between the price action during the first half of 2002, and the first half of 2006. In 2002--between mid-June, and mid-October--the same pattern resulted in a 2000 point drop in the Dow. Thus, if supports don't hold, there is great potential for considerable damage in the next 2-4 months.

Please note: This is my last update until late August. I will be in Athens, Greece, to open up our newest location.

Ike Iossif

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