Friday Weekly Charts

 What could have been a very negative day turned positive on Bernanke's speech (what it was he said, after reading the text of the speech, that cheered the market is beyond me, but the market began rallying as soon as the speech started). The rally, while impressive, was not even enough to get past yesterday's high, and volume wasn't particularly high, either, so, while the market did not sell the news, the buying was fairly weak. What is did do was set up another of those pennant formations, which usually mean a big move is coming. Often, but not always, the initial break is in the opposite direction of the ultimate move.

 There are two pretty obvious pivot points on the weekly chart at 1250 and 1100. From there I projected targets on the low and high sides, depending on whether the market decides to a bull or bear market (it hasn;t been near lng enough to declare this correction over, unless you consider it tp have begun in early May when the SPX topped. the NDX did not, it topped in July, which is when i would consider it to have begun, Of course, the market doesn't give a flip what I think). About 930 on the downside and 1400 on the upside is where I have the projections. That seems a little preposterous, but I have had even more preposterous projections in the past that ended up being hit.

The pivot points on the Nasdaq are closer together, thus making the chart fit the projections much better. This leads me to believe the algorithmic/quant traders are trading off this chart.

They could also be trading off the Dow chart, although the pivot point placement here is a little debatable, and slight shifts make some dramatic changes, but overall, it looks like this chart fits pretty well, too.

The Dow transports also fi reasonably weel, and as weak as this has been lately, the downside target seems wekl within reach.

The Russell 2000 has a very wide range, thus the targets are, on the upside, in la-la-land, and on the downside, in Mad Max territory.  I am anticipating a bounce here, but not any higher than 770, if that far.

Weekly stochastics have turned upward, so, if you follow the advice of John Murphy, trading should be on the long side for now. I am not expecting a very strong move up, despite this week's follow through day, but it should be strong enough to get some decent moves in leading stocks. Bernanke cloaked his words today, and really doesn't plan on announcing anything until the net FOMC meeting in mid-September, which should be just in time for next year's elections.

I will have the new highs update shortly.