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WEEKLY CHARTS

DJIA: Channel support at 10380 and channel resistance at 11500, but it will have to get above 10975 before it can challenge 11500.

DJTI: If resistance at 3750 is penetrated, the upside target is 4000.

SP500: It has support at 1165, and resistance at 1235. If It can overcome resistance, the upside target is 1250-1260.

NASDAQ: Notice that the 2000-1970 zone represents major support. Also notice two possibilities: a) either it has been building strength and it is double-bottoming ahead of a blast off to the upside within 1-3 weeks, OR, b) the reason it has been unable to move away from channel support is because of lack of strength, and thus, a break-down will take place within the next 1-3 weeks.

HUI: The advance has been relentless for four consecutive weeks. However, if you examine all the extended HUI advances, you will notice that most 3 week advances were interrupted by at least one week of a pullback. Thus, the odds favor a pullback at this point. On the other hand, if we get a close above 220, look for further advance to 230. One thing that we need to keep in mind is the chart pattern similarity between March of last year and now. If the HUI can't break above resistance we may get a repeat of last year's breath-taking decline.

Oil: It has resistance at $50.00, and support at $45.

Conclusion

On March 1st I said: "Last week we got a rather robust advance in terms of price. However, the pattern in the Summation Indexes, Quantifiers, and BSEs, is often associated with tops, and not with bottoms. There is certainly more room for advance to the first upside targets, but we believe that will mark at least a short-term top, if not an intermediate-term one. We would use the opportunity to exit long positions."

Currently, all the major indices made it to our first upside targets, and now the question is: what's next? Based upon the price pattern, and the patterns formed by our technical indicators, we believe that the graphs below represent the two most probable scenarios going forward. First notice the NASDAQ is still in a down-trend, but it is challenging channel resistance at point "A." If it can close above 2070-2080, then it would be in a position to challenge the next resistance level at point "B" near its most recent recovery highs at 2200. However, if it can't overcome resistance, in all likelihood it will test channel support with a good 150-180 points below Friday's close at point "C." Thus, if resistance holds, look for a decline to 2000, and if the 2000 level doesn't hold, 1900 will be the next logical downside target.

With regard to the SP, if the break-out is for real then the SP should not only be able to stay above 1210, but it ought to accelerate its advance. However, if within the next 2-4 trading days the SP closes below 1210 for two consecutive days, then in all likelihood the decline will accelerate, and at the very minimum we'll see a revisit to the 1190-1185 support level. So, bullish above 1210, neutral between.

Ike Iossif

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