Lets take a broad overview of the six main indexes...
IWM, (representing rus'2000 small cap)
Interestingly, IWM again got stuck around the resistance zone of 82, and we've now seen two consecutive weeks of lower highs. There is however no clear turn lower on any of the usual indicators though
Nasdaq Comp
Tech is looking a little weak, but so far..nothing conclusive. All the bears will need is a break back below the 10MA of 2869. Nasdaq 2600 would be a very reasonable target in the next multi-week wave lower.
NYSE Comp
The master index remains the best measure of where the market is, and so far..we're not broken above what is a key declining trend from the spring highs. Bears need a break below (what is still quite possibly a giant bear flag/wave'2), currently 7725.
Dow
The Dow remains pretty strong, bears need a 200pts fall to break the weekly 10MA, and then the door should be open to a move back to 12k - equivalent to the recent sp'1266 low. If 12k fails to hold in the next wave down, then a VERY likely target is 11k, which matches up with trends/support as seen on the monthly cycle chart.
Sp
Bears need a break below last weeks low of 1345, and preferably the weekly 10MA of 1335. There is a lot of resistance all the way to the recent June low of 1266. It will not be easy for the bears to break new lows in August.
From the bullish perspective, bulls need a break over 1380/90, any closes over 1390..would probably allow a full re-test of the April highs of 1422. However, any closes over 1390, and the monthly index cycles will start to turn bullish again, and it would be close to destroying ALL the 'big picture' bearish outlooks.
Transports
Transports - the 'old leader' remains the weakest sector/index, and that is clearly seen with this weeks closing action on Friday. Arguably the bear flag/ wave'2 is now being broken, and we did close Friday below the weekly 10MA. The next key level is the big 5000, and that should open up a fairly accessible move to the June lows of 4800. Primary target for Aug/early Sept' would be at least 4500 - probably equivalent to sp'1225/00.
Summary
First, its important to recognise that the bears are still fighting what remains a broad up trend. We've seen a strong move from sp'1266 to Thursdays peak of 1380...with the Friday close of 1362.
From a MACD (blue bar histogram) cycle perspective, there is NO clear rollover yet on any of the indexes. Even the tranny is yet to show anything really decisive.
Targets for next week
Many recognise we need to break below sp'1350/45, that should open up a new attempt to break the recent support zone of 1310/00.
Where will we open Monday ? That's too hard (and probably pointless) to guess. With AAPL earnings at the Tuesday close, its still possible we might yet put in one final high -which would be truly annoying for those holding short across the weekend.
Most important of all, we have US GDP Q2 data next Friday - along with EU GDP data also next week. That should be a very serious reminder that the US is slipping into a recession - as is already the case in Japan, UK, and the wider Euro-zone. The US economy is not going to be magically immune, and when Mr Market comes to price this in...that should become our wave'3.
A very exciting and potentially clear turn lower should be apparent by the end of next week.
Good wishes!
