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WEEKLY CHARTS

DJIA: The Dow is back at channel resistance from which it has retreated 3 times in the last 12 months. Weekly support at 11000 and at 10650/10600; resistance at 11160.

DJTI: The T.I. is back at channel resistance from which it has retreated 3 times in the last 12 months. Weekly Support at 4425, 4250 and at  4000. Resistance at 4575.

SP500: The SP500 is back at channel resistance from which it has retreated 3 times in the last 12 months. Weekly support at 1278/75, and 1250/46; resistance at 1300/1305.

NASDAQ: Weekly resistance at 2300 and 2350; support at 2230 and 2200.

HUI: Weekly support at 300, 275 and at 250; resistance at 325 and at 350.

OIL: Weekly resistance at $68.75 and $72; support at $59.00.

Notice the T.O.s pointing down, which means the path of least resistance is to the downside.

The trend is UP for NASDAQ.

The trend is NEUTRAL for the SP.

SUMMARY

You probably re-call the remarks we made a few weeks ago with regard to the relation of oil versus equities, and bond yields versus equities. At that time we said, "In conclusion, we got two possibilities ahead of us. Oil prices and bond yields come down further, fueling a rally  in  the equity markets. Or,  oil  prices, and bond yields bottom out at current levels and reverse to the  upside,  causing  the equity markets to retreat back  down to the bottom of their range.  So, over the  next 5-10 trading days, pay attention to the $59-$58  support zone for oil, and  to the 4.375-4.425  support  zone for  the yield of the 10-year bond. If support holds and oil/bond yields  begin  to rise,  then we ought to look for a decline in the equity markets ranging between 4.5% and 7.5%.  The opposite holds true if  oil and bond yields break down;  should that happen, we ought to look for a rally in equities between 4% and 5%."

Notice how the yield of the 10-year T-Note closed marginally above resistance, which in turn  spooked the equity markets. Unless bond yields retreat back down, the equity markets have no place to go but sideways or down. The key thing to pay attention to for the rest of the week is whether support holds, if it doesn't expect a further decline towards the first downside targets. If it holds, while bond yields retreat simultaneously, then the bulls will be heartened and emboldened to make another attempt to take out resistance. Please read also Timing.

Ike Iossif

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