WEEKLY CHARTS

DJIA: Weekly support at 12250 and 12000. Resistance at 12750.

DJTI: Weekly support at 4800 and 4600. Resistance at 5000 and 5200.

SP500: Weekly support at 1410 and 1364. Resistance at 1455.

NASDAQ: Weekly resistance at 2525. Support at 2400 and 2340.

HUI: Weekly support at 310. Resistance at 360.

USD: Weekly resistance at 84.00. Support at 82.25 and 81.00.

DJU: Weekly support at 500; resistance at 520.

OIL: Weekly resistance at $67.50 and $72.50. Support at $62.50 and $57.50.

The SP-BSE is rising--which is bullish--but the steep negative divergence is bearish, implying that the "overall picture" remains neutral.

The Oscillator is rising--which is bullish--but the steep negative divergence is bearish, implying that the "overall picture" remains neutral.

The SP-TO is rising--which is bullish--but the steep negative divergence is bearish, implying that the "overall picture" remains neutral.

The trend is UP for the SP.

The Quantifier for the SP500 has been unchanged for four consecutive days. When the Quantifier experiences little or no change at all for two or more consecutive days, within the next 2-3 trading days we get a move in excess of 1.0% in the SP, and in excess of 1.5% in NASDAQ. This indicator doesn't predict direction, only magnitude of the impending move.

SUMMARY

Last week we said, "The major indices--in terms of price--stalled at resistance, pulled back intra-day to support, bounced from it, and ended the week mid-range between support and resistance. At the same time, most of the technical indicators finished near the zero line confirming the "neutral" price action. In other words, at the present time the markets are in a rarely seen "bona-fide" neutral state. Usually it takes some sort of a news item that is perceived by market participants as "important"--it never truly is--which tips the scale over to the bullish or the bearish side. Consequently, for next week we suggest to remain mostly in cash as long as the indices remain between support and resistance. Switch to modestly long on a close above resistance or to modestly short on a close below support (10%-20% of total capital). Finally, re-evaluate when the indices reach the first upside or downside targets, and either take profits or add to positions."

This week, the "bona-fide" neutral state developed a positive bias as prices advanced modestly and all indicators turned positive. The only "wrinkle" was the huge negative divergences recorded by virtually every indicator we follow. Going into next week, as long as the SP remains above 1425 and NASDAQ remains above 2450--on a daily closing basis--the bias will remain positive and prices ought to drift higher. If the SP and NASDAQ close below the levels we mentioned then it will be time to re-evaluate.

Ike Iossif