UNDERLYING SUPPORT LEVELS ARE STILL HOLDING -- GOLD STOCKS HAVEN'T GIVEN BUY SIGNAL YET -- BUT OIL STOCKS HAVE

SUPPORT LEVELS ARE STILL HOLDING... Despite the fact that the market had another losing week, there wasn't much technical damage done. The only negative was the fact that all of the indexes closed below their 50-day moving averages. All of the other support levels that I showed last week are still holding. Chart 1 shows the Dow Industrials still trading above initial chart support at 10417. Point & figure support still resides at 10450. No p&f sell signal has yet been given. The same is true of the S&P 500.

Chart 1

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S&P 500 BOUNCES OFF SUPPORT... The daily bar chart shows S&P 500 support at its late November/early December lows around 1170. Its p&f chart shows support from 1175 to 1170. Supports are still holding.

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NASDAQ INDEXES STILL HOLDING TRENDLINE SUPPORT... Last week I showed the two Nasdaq indexes testing trendline support under their August/October lows. The trendline support I gave was 2075 in the Composite Index and 1550 in the Nasdaq 100. The two bar charts (Charts 5 and 7) show that those trendline support levels are still holding. Their p&f charts show both Nasdaq indexes having already given short-term sell signals. The two next support levels that I mentioned last week -- 2060 for the Composite and 1550 for the Nasdaq 100 -- are also still intact. [The p&f supports are located at the bottom of the next o column]. The bottom line is that very little has changed over the last week. Despite early January weakness, no major damage has been done to market uptrends. That leaves open the possibility for another rally attempt.

Chart 5

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GOLD INDEX HASN'T GIVEN P&F BUY SIGNAL YET -- BUT OIL INDEXES HAVE... One of our readers asked if the Gold & Silver (XAU) Index had given a p&f buy signal. The answer is no. Chart 9 shows that the XAU is still in a pattern of lower lows and lower highs. The red zero column (today's action) show it retesting its recent low. To give a p&f buy signal, the XAU would have to rise to 97 and exceed its previous x column. Oil stocks, however, did give a buy signal. Chart 10 shows the Energy Select Sector SPDR (XLE) on a p&f buy signal. Oil service stocks also gave a buy signal. It looks like a good time to be "re-energizing" one's portfolio.

Chart 9

Chart 10