As indicated in last week’s post, a break of the swing low of 8461 on the DOW would likely set up a retest of the bottom side of the consolidation pattern from May, which is exactly what happened.  We are now challenging the backside of the 200 sma and we are sandwiched between the 50 and 200 sma.  The index could break either way out of this current consolidation.  We are coming into earnings season soon and that could be the catalyst needed to move the market.  The first target to the upside will be 8587 and then 8878.  A break of the May lows of 8221 will portend a bearish move down to 8191 and then 7750.

The SPX successfully retested the 200 sma for the second time since breaking through to the upside on 6/1.  We also got a bullish 50 sma crossover of the 200sma this past week.  At 918, we currently reside at the double top from 12/8 and 12/17, 2008. Our first target is 930 from 5/18/2009 then 944 from 1/6/2009 and finally the recent high at 956.  If the index breaks the Tuesday’s low of 889, we could go to the swing low of 879 from 5/15 and then the swing low of 827 from 4/21.  I feel that 875 is stout support and it will be significant it breaks that level.  I am still bullish.

The COMPQ is really the shining star!!  I have maintained that the Tech sector will lead the way and it has.  The index is bullishly above both the 50 and 200 sma.  Immediate upside targets are 1880, 1897 and 1905.  Downside levels to watch are 1793, 1773 and 1754.  We are going higher!!

Week over week, the DOW is down 102, the SPX is off by 2 and the COMPQ posted an 11 point gain.

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