The large cap indices – S&P 500 and Dow Jones Industrial Average (DJIA) – are in confirmed uptrend along with the tech-heavy NASADAQ Composite. Their all three timeframes – monthly, weekly and daily – are showing varying degree of uptrend and bullish chart formations. The broader market index, Wilshire 5000 Total Market Index, is also in similar boat.

The smaller cap indices – Russell 2000 and Dow Jones Transportation Average (DJTA) – are, however, not in confirmed uptrend. Their trends and chart-patterns on three timeframes are either not clear or conflicting.

Three large caps indices and the broader market index have all made all time – both intraday and closing – highs on July 12, 2019. DJTA is almost 7.0% off it’s all time high and Russell 2000 by almost 8.0%.

DJIA and DJTA had made – then all time – highs in September 2018 and then they both broke below the last swing low in December 2018 thus breaking the sequence of higher highs and higher lows. DJIA has again made all time high but DJTA has not conformed it, which according toe Dow Theory is not a very good sign.

Another warning sign or caution is that the oscillators, RSI and Stochastic, are also not confirming the price action on monthly and weekly timeframes for large cap stocks. The bottom line is that as most major indices are moving higher and some are showing bullish chart patterns the bias in the market should be up, but with caution.

S&P 500

• Current Trend
  • Confirmed Uptrend
  • The trend on monthly, weekly and daily timeframes is up but oscillators are indicating overbought conditions

• Patterns:
  • A broadening pattern, emerging on weekly chart, calls for caution
  • A bullish cup-with-handle pattern on daily timeframe

• Critical Levels
  • The swing low of 2728.81 reached during the week of June 3, 2019
  • The major resistance levels ae monthly R1 pivot at 3027.67 and weekly R3 pivot at 3050.38
  • Current target is near 3050.00
    • The 161.8% Fibonacci extension of ABCD pattern that emerged in 2018 is achieved at 3007.00
      • DC = AB * 161.8%
      • A=2532.69 (Feb-18), B=2940.91 (Sep-18), C=2346.58(Dec-18)

Monthly Chart

• Up-sloping channel; in the upper median of a regression channel
• 9-month RSI is below the high of 94.22 reached in January 2018;
  • RSI has twice made Bearish Divergences and a third one is emerging
  • RSI is below a downtrend line from high of January 2018
• Stochastic (9,1, 3) is above 80 but %D is flashing Bearish Divergence
• Price action is bullish but oscillators are calling for caution

Weekly Chart

• Emerging broadening pattern
• 9-week RSI reached a high of 94.19 during the week of January 22, 2018 when the index made a high of 2872.87; since then it has made Bearish Divergences twice and a third one is emerging
• Stochastic (9, 1, 3) is above 90 but %D is flashing Bearish Divergence
• Like on monthly timeframe, the oscillators indicating overbought conditions

Daily Chart

• Broken above a resistance level
• A cup-with-handle pattern  cup was formed from September 2018 to May 2019
• Stochastic (70, 1, 3) Pop, a rise above 70, occurred in early June 19;
  • Usually the Stochastic Pop lasts for more than 2-3 months during which the index continues to rise
  • Previous Stochastic (70,1,3) Pop started lasted from early February 2019 to early May 2019 and the index rose more than 8.5%

Dow Jones Industrial Average

• Current Trend
  • Confirmed Uptrend
  • The trend on monthly, weekly and daily timeframes is up but oscillators are indicating overbought conditions
• Patterns:
  • A broadening pattern, albeit not too clear, is emerging on weekly chart
  • Breaking above a cup-with-handle pattern on daily timeframe
• Critical Levels
  • The swing low of 24680.57 reached during the week of June 3, 2019
  • The major resistance levels ae monthly R1 pivot at 27444.70 and R2 at 28289.43
  • Current target is near 27523.00, which is 161.8% Fibonacci extension of ABCD pattern that emerged in 2018
    • DC = AB * 161.8%
    • A=23360.29 (Feb-18), B=26951.81 (Oct-18), C=21712.53 (Dec-18)

Monthly Chart

• Up-sloping channel; price near the upper bound of a regression channel
• 9-month RSI is below the high of 95.28 reached in January 2018;
  • RSI has twice made Bearish Divergences and a third one is emerging
  • RSI is breaking above a downtrend line
• Stochastic (9,1, 3) is above 90 but %D is flashing Bearish Divergence
• Price action is more bullish than that for S&P 500 but oscillators are in overbought region

Weekly Chart

• Emerging broadening pattern like that for S&P 500 but less clear
• 9-week RSI is below the high reached during the week of January 22, 2018
  • RSI has made Bearish Divergences twice and a third one is emerging
  • RSI is breaking above a downtrend line
• Stochastic (9, 1, 3) is above 90 but %D is flashing Bearish Divergence
• Like on monthly timeframe, the oscillators indicating overbought conditions

Daily Chart

• Broken above a resistance level
• A cup-with-handle pattern – cup was formed from October 2018 to May 2019
• Stochastic (70, 1, 3) pop occurred in June 2019
  • Previous Stochastic (70,1,3) Pop lasted from early February 2019 to early May 2019 and index rose more than 4.5%

NASDAQ Composite

• Current Trend
  • Confirmed Uptrend
  • The trend on monthly, weekly and daily timeframes is up but oscillators are indicating overbought conditions
• Patterns:
  • A double-top or cup-with-handle pattern emerging on weekly chart
  • Breaking above a cup-with-handle pattern on daily timeframe
• Critical Levels
  • The swing low of 7292.22 reached during the week of June 3, 2019
  • The major resistance levels ae monthly R1 pivot at 8296.16 and weekly R3 at 8315.42
  • Current target is near 8621.42, which is 161.8% Fibonacci extension of ABCD pattern that emerged in 2018
    • A=6630.67 (Feb-18), B=8133.30 (Aug-18), C=6190.17 (Dec-18)

Monthly Chart

• Up-sloping channel; price near the upper bound of a regression channel
• 9-month RSI twice made Bearish Divergences since topping out in January 2018
• Stochastic (9,1, 3) is above 90 but %D is flashing Bearish Divergence
• Price action is bullish but oscillators are in overbought region

Weekly Chart

• Trying to break above a resistance level that, if convincingly broken, will complete a double bottom and a cup-with-handle pattern
• 9-week RSI-9 is showing Bearish Divergence with price
• Stochastic (9, 1, 3) is above 90 but %D is flashing Bearish Divergence
• Bullish but oscillators are indicating overbought conditions

Daily Chart

• Breaking above a resistance level
• A cup-with-handle pattern  cup was formed from August 2018 to May 2019
• Stochastic (70, 1, 3) Pop occurred in early June 2019 and then again in later in the month
  • Previous Stochastic (70,1,3) Pop started lasted from early February 2019 to early May 2019 and the index rose nearly 13.0%

Russell 2000

• Current Trend
  • Uptrend Under Pressure
    • The trend on monthly has stalled
    • Trend on weekly timeframe is indecisive and choppy
    • Trend on daily timeframes is sideways
• Patterns:
  • An emerging symmetrical triangle on weekly charts
  • A cup-with-handle pattern is forming on daily but not yet completed
• Critical Levels
  • The swing low of 1460.49 reached during the week of June 3, 2019
  • The major resistance level is 1618.36, the high reached during the week of May 6, 2019

Monthly Chart

• Up-sloping channel; price is in the lower half of the regression channel
• 9-month RSI is moving near 50 for the past few months
• Stochastic (9,1, 3) has recently turned up from near 50
• Stalling after bouncing off the lower bound of the regression channel

Weekly Chart

• Within a symmetrical triangle
• 9-week RSI-9 is moving around 50 since the beginning of the year
• Stochastic (9, 1, 3) is rising; %K crossed above %D from below 10 in early June
• Sideways move since February 2019 in a congestion zone that first appeared in early 2018

Daily Chart

• Moving below a resistance zone;
  • a cup-with-handle is emerging though not near a breakout point
• Mostly moving within a horizontal channel – between 1600.00 and 1460.00 since late January 2019
• Stochastic (9, 1, 3): %K is crisscrossing %D lower since late June 2019

Dow Jones Transportation Average

• Current Trend
  • Uptrend Under Pressure
    • The trend on monthly has stalled
    • Trend on weekly timeframe is indecisive and choppy
    • Trend on daily timeframes is sideways
• Patterns:
  • An emerging symmetrical triangle on weekly charts
  • An upsloping flag and a Head-&-Shoulder pattern emerging on daily
• Critical Levels
  • The low of 9715.20, reached on June 3, 2019
  • The major resistance level is 11148.36, the high reached on April 24, 2019

Monthly Chart

• Up-sloping channel; price in the lower half of a regression channel, which was breached to the downside many times
• 9-month RSI is declining since January 2018
  • Twice made Bearish Divergence
• Stochastic (9,1, 3): %K crossed above %D but the bias is down
• The trend is stalling and the bias is down since January 2018

Weekly Chart

• Within a symmetrical triangle
• 9-week RSI-9 is below a downtrend line from January 2018 high
  • Moving around 50 since January 2019
• Stochastic (9, 1, 3): %K crossed above %D in early June and is rising above 90, which is mildly bullish
• Indecisive trend and in a congestion area that first appeared in early 2018

Daily Chart

• Moving near the middle of a horizontal channel that is forming since late January 2019
  • An upsloping flag – higher highs and higher lows – since early June
  • Potential Head-&-Shoulder forming
• Stochastic (9, 1, 3): %K crossed above %Din early July

Wilshire 5000 Total Market Index

• Current Trend
  • Confirmed Uptrend
  • The trend on monthly, weekly and daily timeframes is up but oscillators are indicating overbought conditions
• Patterns:
  • A broadening pattern, emerging on weekly chart, calls for caution
  • A bullish cup-with-handle pattern on daily timeframe
•  Critical Levels
  • The swing low of 28107.05 reached during the week of June 3, 2019
  • The major resistance levels ae monthly R1 pivot at 31119.63 and weekly R3 at 31347.05
  • Current target near 31033.00 is achieved, which is 161.8% Fibonacci extension of ABCD pattern that emerged in 2018
    • A=26293.63 (Feb-18), B=30560.54 (Sep-18), C=24129.49 (Dec-18)

Monthly Chart

• • Up-sloping channel; price in the upper half of a regression channel
  • 9-month RSI below January 2018 high level
    • Made Bearish Divergences in September 2018
    • Below a downtrend line

• Stochastic (9,1, 3) is above 90 but %D is flashing Bearish Divergence
• Price action is bullish but oscillators are in overbought region

Weekly Chart

• Emerging broadening pattern like that for S&P 500 but less clear
• 9-week RSI is below the high reached during the week of January 22, 2018
  • RSI has made Bearish Divergences twice and a third one is emerging
  • Broken above a downtrend line, which is bullish
• Stochastic (9, 1, 3) crossed above %D in early June
• Like on monthly timeframe, oscillators indicating overbought conditions

Daily Chart

• Breaking above a resistance level – a cup-with-handle pattern cup was
• Stochastic (70, 1, 3) Pop occurred in early June 2019 and then again in later in the month
  • Previous Stochastic (70,1,3) Pop started lasted from early February 2019 to early May 2019 and the index rose nearly 10.0%