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Stock Market Charts Are Positive, But Investors Should Beware

NEW YORK (TheStreet) -- I show new monthly, quarterly and semiannual risky levels for all five major equity averages with only one semiannual value level for each. This setup results in huge spreads between annual value levels and monthly, quarterly and semiannual risky levels.

At the beginning of the year, I described the pattern among the value levels, pivots and risky levels as a tangled bowl of spaghetti. Now the pattern is a "Black Hole" that lurks below positive weekly chart profiles and the semiannual value levels at 16301 for the Dow Jones Industrial Average, 1789.3 for the S&P 500 Index, 3972 Nasdaq Composite index, 7423 for Dow Transports and 1139.81 for Russell 2000.

The weekly charts are positive but overbought with the Russell 2000 still showing rising 12x3x3 weekly slow stochastics. The key to continuing to set new multiyear or all-time intraday highs are weekly closes above the five-week modified moving averages at 16720 for the DJIA, 1925.1 for the S&P 500, 4275 for the Nasdaq Composite, 8006 for Dow Transports and 1159.15 for the Russell 2000.

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Weekly closes below these key moving averages indicate risk to the semiannual value levels with that "Black Hole" risk to the annual levels at 14835 and 13467 for the DJIA; 1539.1 and 1442.1 for the S&P 500; 3471 and 3063 for the Nasdaq; 6249 and 5935 for Dow Transports; and 966.72 and 879.39 for the Russell 2000 later in the year.

Let's look at the potential volatility for the major equity averages:

DJIA (16827) has semiannual and annual value levels at 16301, 14835 and 13467, respectively, with monthly, quarterly and semiannual risky levels at 17364, 17753 and 18522, respectively.

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Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

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