Tech Leads Mixed Week: S&P 500 Hits Historic 5000 Mark

TECHNICAL ANALYSIS (by Doug Sooley).

Major Indices Week of February 9, 2024

Nasdaq NDQ Weekly

Stocks traded a mixed week tech (Chips!) continuing to lead the way and the S&P 500 closing above 5000 for the first time in history. The FANG led the way once again as it is knocking on the door of 10K. Even the sluggish secondary markets came to life last week with the Russell posting a strong gain. This is the fifth straight up week and the Dow has now closed higher 14 out of the last 15 weeks. The narrative regarding a thin/narrow/shallow rally continues…no matter the adjective, is that really the case as analyst Ed Yardeni argues?

The Dow traded an inside week, eking out a fractionally higher close, in the upper end of the week’s range. Psychology continues to be very much in favor of a third-wave move. There are friendly earnings with selloffs, negative news with the meltdown in commercial real estate, declining breadth, there is ‘cautionary’ discussion as prices notch record highs, and there is no sign of crazy mania…even with sentiment remaining high. The Dow has targets just overhead at 39075 and, with the S&P crossing a critical milestone, continued rallies should get discussions going about Dow 40K. BRKA shares continued their explosive tear to the upside. One other note, China pulled out an upside reversal last week after totally manipulating their markets.

Prices did not show much reaction to the critical timing mid-week. Bonds performed poorly as the rate-cut mania is letting out the air. This coming week’s trade will be key to bonds and the dollar, so keep an eye on those markets as they come off a very key timing point. Tuesday marks minor timing, where we will get the January CPI (estimates are 0.2%).

52-Week A/D Line

Sentiment indicators remain in greed/extreme greed readings and not moving sharply in either direction…with breadth declining. Last week in the AAII Sentiment Survey: Neutral Sentiment Increases. The Dow A/D line sits at 5723, at record highs. The VIX closed lower, on the bottom of the weekly range. The Put/Call ratio moved to 0.70, reflecting extreme greed. The 52-week, A/D moved up to +3.15% and still indicates greed. The Dow closed the week up +0.04%. The S&P was up +1.37%. The Nasdaq ended the week up +2.31%, the FANG raced higher into record highs, up +3.16% and the Russell finally came to life, closing up +2.41%. The 10-year notes sold off with prices setting new lows for 2024, closing in the bottom of the weekly range. For S&R numbers, see the most recent Special Report. The CRB was up +2.57%...as crude oil staged an outside week up and closed on the top of the week’s range. Gold closed lower and in the bottom half of the weekly range. The CoT remains sleepy with dealers buying, asset managers selling, dealers buying, and speculators selling.

Timing Points ?

Tuesday marks minor timing.?

• 02/13???????????????????? ***
• 02/21-22????????????? *** X possible extreme
• 02/28???????????????????? **
• 03/04???????????????????? ** (bonds)

CNN Fear & Greed Index

AAII Investor Sentiment Survey

Dow Jones Industrial Average Hourly HLC

The Dow closed slightly lower Friday, The hourly is neutral but has a bullish-looking rising wedge or a reverse pennant pattern. The action last week leaves all the numbers the same. Resistance remains pivotal at 38731/38734. Further rallies over 38734 should test the intraday highs at 38783. Closes over 38783 suggest a move to long-term targets at 39075. Closes over 39075 offer counts to targets at 40245.4 with longer-term potential to targets in the 45244 area. Above 45244 gives monthly counts to 47400.

Support is at 38391 and pivotal at 38149. A breakdown under 38149 can carry to 37953 with full counts to critical short-term support of 37757/37750. Closes under 37750 setup a move toward 37259 with counts to 36317/36310. A breakdown under 36310 opens counts to 35555. Closes under 35555 can carry toward critical short-term support of 34793/34785. Closes below 34785 open counts to 33722 with potential to 32527/32520.

Dow Jones Industrial Average Weekly HLC

Resistance

• 38731/38734 *** ↑
• 38783 *** ↑
• 38887 **
• 39031 **
• 39075 *** ↑ TARGET
• 39319 **
• 39463 ***
• 39607 **
• 39751 **
• 39895 ***
• 40039 **
• 40245.4 *** ↑ TARGET
• 40326 **
• 40398 ***
• 40470 **
• 40542 *** ↑
• 40614 **
• 40686 **
• +++++++++
• 45244 *** ↑ TARGET

?Support

• 38567 **
• 38545 ** ↓
• 38457 **
• 33891 ** ↓
• 38220 ** ↓
• 38149 ** ↓
• 37953 *** ↓
• 37757/37750 *** ↓
• 37500 **
• 37357 **
• 37259 ** ↓
• 37122 *** ↓
• 37073 ** ↓
• 36960 **
• 36802 **
• 36660 **
• 36575 ** ↓
• 36384 ** ↓
• 36317/36310 *** ↓
• 36231 **
• 36140 **
• 36061 **

S&P 500 Cash Index?

The S&P hourly ended overbought on Friday. Prices cleared the 5000 level and further rallies have potential to upside targets in the 5144 area. Closes over 5144 set up a drive to 5288 with counts to 5432. A breakout over 5432 will open potential to the 5720 area. Closes over 5720 offer upside targets at 6000/6008.

S&P 500 Index Weekly HLC

Support is at 5000 and 4986. A breakdown under 4986 sets up a move to 4959 with counts to 4938/4937 with full potential toward pivotal short-term support of 4915/4912. Closes under 4912 suggest 4897 and possibly 4856 while opening potential to critical support of 4815/4812. A breakdown under 4812 should test 4764 with counts to 4676. Daily closes under 4682/4676 count toward 4566 with potential to critical short-term support of 4457/4452. Daily closes under 4452 set up a move to 4442.

Resistance

• 5030 **
• 5036 **
• 5072 **
• 5108 **
• 5144 *** ↑
• 5180 **
• 5216 **
• 5288 ***
• 5360 **
• 5432 *** ↑
• 5504 **
• 5576 ***
• 5648 **
• 5720 *** ↑
• 5792 **
• 5864 ***
• 5936 **
• 6008 *** ↑

Support

• 5000 **
• 4986 ***
• 4959 ***
• 4938/4937 *** ↓
• 4915/4912 *** ↓
• 4897 **
• 4976 **
• 4856 *** ↓
• 4839 **
• 4828 **
• 4815/4812 *** ↓
• 4790 **
• 4775 ** ↓
• 4764 *** ↓
• 4733 **
• 4714 ** ↓
• 4699 **
• 4682/4676 *** ↓
• 4663 **
• 4643 ** ↓
• 4608 *** ↓
• 4581 **
• 4566/4565 *** ↓

?Charts courtesy of CQG, Inc., CNN, ?Koyfin, ?and AAII