Bullish Forecast For Next Week Of the Major Indices

The Dow, Nasdaq, and S&P 500 all had a strong week.

In the Dines principle of trend trading you assume continuation of the previous trend until proven otherwise. On sideways days, assume continuation of the previous trend.

S&P 500

Overall, you should be feeling upbeat about the S&P 500 going into next week.

However, caution is recommended due to a possible Descending Triangle pattern forming (in light gray lines above), and the proximity to the 200 day MA line.

A big down day on Monday and Tuesday would complete the Descending Triangle pattern and would be a short term sidelines signal until proven otherwise.

A big up day on Monday and Tuesday would push through the $930 to $931 level which was the previous May high, the 200 day MA line, and the Donchian Channel. This breakout would be a short term bullish signal until proven otherwise.

Nasdaq

Overall, you should feel upbeat about the Nasdaq, even more so than the S&P 500.

Last week was significant in that we have confirmation of a break above the 200 day MA line, something that the S&P 500 and the Dow have not done yet. This upside leadership from the Nasdaq is important in sector rotation theory that states the Technology sector will lead us out of all bear markets.

However, caution is recommended until we get a break about the May high of $70.22 and the upper Donchian Channel wall at $70.

Dow

Overall, you should feel upbeat about the Dow going into next week.

However, caution is recommended as the Dow has been lagging behind the S&P 500 and the Nasdaq as evidenced from its greater distance from the 200 day MA line.

A break above the upper Donchian Channel wall at $8591 and the May high of $8587 would be a short term bullish signal.