9:00am (EST)
The Dow gained 62 points, or 0.5%, on Friday and closed at 12,130. For the week, the index fell 260 points, or 2.1%, and saw its 3-week winning streak come to an end. We had a feeling when the blue-chips reached our 12,300-12,350 target that a pause was coming but the good news is that the bulls held support. The Dow was able to hold 12,200 on Tuesday and 12,000 on Wednesday before finishing this week right between our downside targets. There is further support at 11,800 and then 11,600-11,500.
The S&P 500 added 14 points, or 1.1%, and settled at 1,319. For the week, the index dropped 23 points, or 1.7%. It was the biggest decline since mid-November but we were encouraged by the close above 1,300 each day. This area will continue to act as short-term support with 1,275 and 1,250 providing additional layers of backup.
The Nasdaq advanced 43 points, or 1.6%, on Friday to finish at 2,781. For the week, the index declined 53 points, or 1.9%. On Tuesday, our first line of support held which was the 2,750 level. On Wednesday and Thursday 2,700 came into play but held. There is additional support at 2,650-2,600.
We were encouraged by Friday’s action but we remain a little cautious until some of the world’s tensions ease up. While we doubt the current bull market rally has officially ended, we could be setting up for a test lower or at least a trading range for a few weeks. We would like to see the bulls make a push back to resistance then hold but it will all depend on the price of oil. If oil stays under $100 then we should see some stabilization in the market. If it climbs higher then we can almost expect the next wave of support to be tested.
With that said, oil is slightly lower this morning while futures are pointing towards a higher open. Dow futures are up 56 points to 12,166; S&P 500 future are up 7 points to 1,326; Nasdaq 100 futures are higher by 12 points to 2,358.
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