Stock Market Tug-of-War Between the Bulls and the Bears Continues

NEW YORK (TheStreet) -- Even though the Nasdaq Composite and Russell 2000 set all-time intraday highs again last week, these equity averages failed to pull the weekly charts for Dow Jones Industrial Average and S&P 500 to positive from neutral.

Instead, the weekly charts for the Dow 30 and S&P 500 ended last week on June 26 downgraded back to negative from neutral.

The Dow transports continue to anchor the bear side of the tug-of-war, but its weekly chart remains oversold. From its all-time intraday high the transports continue to be in correction territory, down 11.5%.

The Dow industrials ended last week at 17,946.68, up just 0.7% for the year to date and below its 50-day simple moving average of 18,033.79, with the 200-day SMA rising to 17,674.73. The weekly chart is negative, with the index just below its key weekly moving average of 17,990.96, with a momentum reading of 53.52, down from 56.92 on June 19.

The all-time intraday high of 18,351.36 set on May 19 was a failed test of a key level on technical charts of 18,328, which expires on June 30.

The S&P 500 ended last week at 2,101.49 just below its 50-day SMA of 2,106.72, with the 200-day SMA rising to 2,053.21. The weekly chart is negative, with the index just below its key weekly moving average of 2,103.01 and a momentum reading of 66.62, down from 69.38 on June 19.

The all-time intraday high of 2,134.72 was set on May 20.

The Nasdaq Composite ended last week with a close of 5,080.51, still above its 50-day SMA of 5,049.10, with the 200-day SMA rising to 4,796.46. The weekly chart remains positive but overbought with the index above its key weekly moving average of 5,055.86.

The momentum reading of 81.14 is down from 81.56 on June 19 but still above the overbought threshold of 80. The all-time intraday high of 5,164.36 was set on June 24.

The Dow transports ended last week with a close of 8,242.47 below the "death cross" formed by the 50-day SMA of 8,548.75, below the 200-day SMA of 8,742.61. The weekly chart remains negative but oversold, with the index below its key weekly moving average of 8,479.20 and its momentum reading of 17.78 declining from 19.52 on June 19 still below the oversold threshold of 20.

The all-time intraday high of 9,139.92 was set on Nov. 28.

The Russell 2000 ended last week with a close of 1,279.79, still well above its 50-day SMA of 1,255.4, with the 200-day SMA rising to 1,200.95. The weekly chart is positive, with the index above its key weekly moving average of 1,262.33 and with its momentum reading of 75.58 up from 70.44 on June 19.

The all-time intraday high of 1,296 was set on June 23.

During a week where the Nasdaq Composite and Russell 2000 set all-time highs, the Dow transports set its 2015 low of 8,227.44 on Friday. This stretches the rope of the bull vs. bear tug-of-war.

For the bulls to win the technical bull vs. bear tug-of-war, the Dow transports must lead with a close this Thursday above 8,479.20.

For the bears to keep control of the rope, the Dow industrials and S&P 500 would need to end this week below 17,990.96 and 2,103.01, respectively.

For the bears to win, the Nasdaq Composite and Russell 2000 would need to close this week below 5,055.86 and 1,262.33, respectively, with both having momentum readings declining below the overbought threshold of 80.

Meanwhile, the three exchange-traded funds that track the Dow 30, S&P 500 and Nasdaq Composite continue to lean the bearish side. Their weekly charts are below.

Here is the weekly chart for the SPDR Dow Jones Industrial Average ETF (DIA), also known as Diamonds:


Courtesy of MetaStock Xenith

Diamonds had a close of $179.13, fractionally below its key weekly moving average of $179.73, with a momentum reading of 55.21 below the reading of 59.06 on June 19. This makes the weekly chart negative.

The all-time intraday high for Diamonds is $183.35 set on May 20, and a key level on technical charts for this week is $180.29, which suggests that a new high is unlikely. The downside risk in the second half of 2015 are key technical levels of $150.82 and $145.24, which don't expire until the end of 2015.

Here is the weekly chart for the SPDR S&P 500 ETF (SPY), also known as Spiders:


Courtesy of MetaStock Xenith

Spiders had a close of $209.82, just below its key weekly moving average of $210.38, with a momentum reading of 68.17, below the reading of 71.42 on June 19. This makes the weekly chart negative.

The all-time intraday high for Spiders was $213.78 set on May 20, and a key level on technical charts for this week is 210.64, which suggests that a new high is unlikely. The downside risk in the second half of 2015 are key technical levels of $158.47 and $155.56, which don't expire until the end of the year.

Here is the weekly chart for the PowerShares QQQ Trust ETF (QQQ):


Courtesy of MetaStock Xenith

PowerShares QQQ had a close of $109.27 just above its key weekly moving average of $109.14, with a momentum reading of 75.24, below the reading of 76.38 on June 19. A close this week below $109.14 will shift the weekly chart to negative from neutral.

The all-time intraday high for the QQQ was $111.16 set on April 27, and a key level on technical charts for this week provides a key level to hold on weakness of $108.50. The downside risk in the second half of 2015 is to a key level of $89.24, which doesn't expire until the end of this year.

Here is how to read a weekly chart. This chart shows weekly price bars going back to the beginning of 2007 and thus includes the crash of 2008, then the bull market for stocks that began in March 2009.

The red line tracks the ups and downs of the key weekly moving average. The green line is the 200-week SMA.

The red line that oscillates along the bottom of the chart is the momentum reading on a scale of 0 to 100. A reading below 20 is oversold, and a reading above 80 is overbought.

A technically positive weekly chart occurs when a stock ends a week above its key weekly moving average with the momentum reading rising above 20.

A technically negative weekly chart occurs when a stock ends a week below its key weekly moving average with the momentum reading declining below 80.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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