A Comprehensive Analysis of the Latest Technical Trends in DJIA & S&P500 (12-10-2023)
Major Indices Week of December 8, 2023
Noteworthy Trends and Milestones in Stock Trading for the Week
Stocks traded in some tight, accumulation ranges and ended the week at the top end of the weekly ranges with the S&P settling at the highest weekly close since 10 January 2022 as that index set new 2023 trading highs. The Dow is now within striking distance of the record high of 36338.3, set on 27 December 2021. There was a continued narrowing of the spread between the large caps and the small caps. Short-term charts are neutral, the dailies worked off the severely overbought conditions and are trying to hook back up in the stochastics. That said, sentiment is leaning into extreme greed now and, for the Dow, the A/D Line hit 5504 last week…which is a frothy reading. Breadth is picking up steam but, again, it is getting frothy as the markets test the all-time highs. Even consumer sentiment jumped sharply in the recent report.
RSP/SPY Daily
The RSP/SPY is coming off some extreme lows and, technically, it looks like there is room for this chart to run at the present. Again, bullish sentiment is now relying heavily on bets that next year the Fed and the ECB will start notching rates lower. This psychology created the best monthly return for bonds last month since May of 1985. And the 60/40 portfolio recorded the second-best month of the past three decades.
See these charts from analyst. Charlie Bilello.
More reality regarding rates and the central banks will come this week with the CPI and PPI data due out on Tuesday and Wednesday. Data from FRED.
52-Week A/D Line
Optimism Retreats, Greed Indicators Surge, and Asset Dynamics Shift
Sentiment is shifting into greed readings. However, ?the AAII Sentiment Survey: Optimism Dips and Pessimism Surges, Returning to Typical Ranges. The VIX moved to the lowest weekly close since 10 January 2020. The Put/Call ratio stays at 0.78 which reflects extreme greed. The 52-week, A/D moved higher to +2.55% which indicates extreme greed. The Dow closed the week up +0.01%. The S&P was up +0.99%. The Nasdaq ended the week up +0.69%, the FANG regained strength to close at an all-time record high close on the weekly up +1.21% and the Russell closed up +0.98%. The bond market continued higher, with the 30-year futures set the highest weekly close since 5 September 2023. The CRB was down hard, -2.84%...crude oil moved lower, settling in the lower half of the weekly range while gold did a massive loop-the-loop, setting an all-time record high before swooning $150 in the FEB24 contract with futures ending on the bottom of a massive outside week down. The CoT is now showing buying coming from asset managers, commercials and speculators now.
Timing Points ?
Wednesday’s timing on the 6th saw a tradable reversal day for the indices. Timing-wise, Tuesday marks minor timing and the next critical timing point falls Christmas week on the 20th and 21st.?
CNN Fear & Greed Index
AAII Investor Sentiment Survey
Dow Jones Industrial Average Hourly HLC
Charting the Path to New Highs and Critical Support Levels
The Dow hourly is neutral on Friday’s close and the daily is remains overbought but is relieving those ?conditions with the sideways trade. The weekly is in an uptrend and the monthly stochastics are hooking back up with the new highs. Prices are poised for a test of 36338, 36513 area with potential to test the all-time record highs at 36952. Closes into new highs give two objectives, one at 37095 and long-term targets at 38378.5. Closes over 38378.5 offer counts to targets at 40245.4.
Support is at 35935, 35712, 35531, and 35351/35345. Closes under 35345 should test 34780. A breakdown under 34780 suggests a move to 34311 with counts into critical short-term support of 33843/33835. Closes below 33835 setup a move to 33337. Closes under 33337 open counts to 32462 through 32327. A breakdown with closes under 3232770 is bearish and opens counts into the 31565/31555 area.
Dow Jones Industrial Average Weekly
LC
Resistance
Support
S&P 500 Cash Index?
Scaling New Highs and Navigating Key Resistance Levels
The S&P hourly is overbought and trying to hook higher in the stochastics on Friday’s close. The market set new trading highs for 2023 and a new daily closing high for the year. Prices poked above the July high of 4607 and resistance is key now at 4609 and 4637. A breakout with closes above 4637 opens potential toward 4748 and ultimately 4818. Above the record highs opens counts to 4952/5000 with potential to 5144. Closes over 5144 set up a drive to 5288 with counts to 5432.
Support is at 4581, 4563, 4548 and pivotal near-term at 4533/4530. A breakdown under 4530 should test 4416 with potential to 4356. Closes under 4356 should carry to 4296/4293. A breakdown under 4293 can test 4180. Daily closes under 4180 set up a move to 4049 with support of 4103. Daily closes under 4049 open counts to critical long-term support of 3917/3910. Daily closes below 3910 open counts to 3815 and 3770/3754 with potential to monthly support at 3505/3491.?
S&P 500 Index Weekly HLC?
Resistance
Support