Key Levels Of The Market Are Being Challenged

As the stock market rallies key levels are being challenged. The Dow Jones Industrial Average (.DJI) and S&P 500 are above their annual pivots at 33,425 and 3,932, respectively.

The next overall upside target is the monthly risky level at 14,076 on the Nasdaq Composite. The index traded as high as 14,062.49 on Friday.

The Dow Jones Transportation Average (.DJT) traded as high as 15,081.22 on Friday versus its monthly risky level at 15,152.

The Russell 2000 Index (.RUT) traded as high as 2,360.17 on March 15. The April high is 2,280.83 set on April 5, versus the monthly risky level at 2,324. This is a warning that the overall stock market could be in a topping out scenario.

Most on Wall Street look for the small-cap index to provide upside leadership. The weekly charts indicate that the Russell 2000 is showing technical warnings.

The weekly chart for the Dow Jones Industrial Average (.DJI) is positive but extremely overbought. It is well above its five-week modified moving average at 32,819. Its 12x3x3 weekly slow stochastic reading is 93.29, well above the overbought reading of 80.00 on a scale of 00.00 to 100.00. This puts the Dow in an inflating parabolic bubble. Its quarterly value level is 30.546 with semiannual and annual pivots at 32,644 and 33,425.

The weekly chart for the S&P 500 (.SPX) is positive but extremely overbought. It is well above its five-week modified moving average at 3,999.54. Its 12x3x3 weekly slow stochastic reading is 93.10, well above the overbought reading of 80.00. This puts the S&P in an inflating parabolic bubble. Its annual, quarterly, and semiannual pivots are 3,932, 3,809 and 3,785, respectively.

The weekly chart for the Nasdaq Composite (.IXIC) is positive. It is well above its five-week modified moving average at 13,537.91. Its 12x3x3 weekly slow stochastic reading is rising at 63.77. Its quarterly, semiannual and annual value levels are 13,001, 12.395 and 12,000, respectively.

The weekly chart for the Dow Jones Transportation Average (.DJT) is positive but extremely overbought. It is well above its five-week modified moving average at 14,265.36. Its 12x3x3 weekly slow stochastic reading is 95.84, well above the overbought reading of 80.00. This puts Transports in an inflating parabolic bubble. Its annual, quarterly and semiannual pivots are 14,425, 12,177 and 12,121, respectively.  

The weekly chart for the Russell 2000 Index (.RUT) is neutral. It is above its five-week modified moving average at 2,234.84. Its 12x3x3 weekly slow stochastic reading is declining at 71.08. Its annual, semiannual, and quarterly value levels are 2,120, 1,880 and 1,855. respectively.

Here’s today’s scorecard: