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jueves, 12 de abril de 2018

Bearish Short Term

DJ Resistance:  26,616.71  All-time high
                           26,000
                           25,800.35
                           25,400
                           24,876       2017 peak
                           24,758       50 Days moving average
                           24,719       2017 close
                           24,319       20 Days moving average
                           24,280
                           24,100
                           23,514       200 Days moving average
                           23,500
                           23,250       Very strong
                           23,174
                           23,002       Strong, gap
                           22,890
                           22,795
                           22,420       Strong, breakout
                           22,119
                           22,000
                           21,912
                           21,600
                           21,535

Technical Analysis:
DJIA trend in the midterm is bearish. From April low the market has bounced up as a limited correction in these moments. We have to pay attention if we are going to get a follow through running to the 2017 close and high. Those are the real resistances. S&P and NASDAQ Composite reached them.
DJIA 200 days moving average, a long term indicator, is acting as a fabulous support and in the case of DJIA have never been violated from June 2016. Same index in S&P and Nasdaq Composite was violated but the closings are over it.
DJ24,719 (2017 close), DJ24,876 (2017 high) are the important resistances. Also DJ24,758 (50 days moving average) which is pointing down is a strong resistance.
DJIA to take a big step in repairing the charts has to sleep over the negative trend line.
February and March have damaged the chart and the attempts to the up side and get a correction have failed that is why the trend in the medium term is bearish and in the long run is bullish.

Please click over the chart to enlarge it.

Fundamentals:
The fear of a trade war triggers the sales off, Syria situation is acting against the financial markets due the uncertainties. I do not expect a trade war but global geopolitics and especially President Trump initiatives brings instabilities to the markets. I expect the volatility will continue.
The economy is in shape, the inflation is a little bit higher but controlled by the FED. The interest rates are increasing according to the FED´s plan and corporate earnings season is starting. I expect positive corporation numbers.

Dear traders and investors, I don´t want to write at length about why I am positive with the growth in the economy, corporate earnings, unemployment and consumption. The important is to determine the bottom of this correction, I still expect DJ23,250 as the strong support. The good days are coming and we will test the all-time high. Volatility will continue the next days and maybe weeks. Buy the dips!

Good luck, viel Glueck, buona fortuna, buena suerte, bonne chance!
Ulises

miércoles, 4 de abril de 2018

Midterm Trend is Bearish

DJ Resistance:  26,616.71  All-time high
                           26,000
                           25,800.35
                           25,400
                           24,992       50 Days moving average
                           24,876       2017 peak
                           24,719       2017 close
                           24,500       20 Days moving average
                           24,280
                           24,100
                           23,431       200 Days moving average
                           23,250       Very strong
                           23,174
                           23,002       Strong, gap
                           22,890
                           22,795
                           22,420       Strong, breakout
                           22,119
                           22,000
                           21,912
                           21,600
                           21,535

Technical Analysis:
The beginning of the second quarter of this year continues showing the market deterioration.
200 days moving averages works as strong support and is valid at DJ23,431. Other strong support is DJ23,250. Those supports should contain the DJIA although the breakdown of the symmetrical triangle positive trend line. This last breakdown is bearish. The upside attempts have failed when they have tried to break the negative trend line of the symmetrical triangle.
Bulls have to put DJIA over the negative trend line (watch the chart) to repair the chart damages. Other way the trend will continue to the downside.
50 days moving average is pointing down and DJIA is below it same as 20 days moving average. That is bearish.
Bulls target are DJ24,719 (2017 close) and DJ24,876 (2017 peak). Those targets are necessary for the bulls to stabilize DJIA and look for a next higher leg.
S&P have almost violated 200 days moving average.
NASDAQ Composite is set to test 200 days moving average at 6,753.
Conclusion: short and midterm have a bearish trend.

Please click over the chart to enlarge it.

Fundamentals:
S&P 500 index P/E is below 17 times at SP2,600. It is very attractive especially with a growing economy, increasing corporate earnings therefore institutional investors should be looking for the best opportunities in the stock market.
President Trump is intervening in the financial markets with the trade war and accusing Amazon with the low taxes payed by the corporation and its distribution cost through the Post Office. We wait for the next meeting with the dictator of North Korea.

S&P should get SP2,298 to confirm a correction (20%) and to risk to enter in a bear market below this support. The current correction right now is less than 15%. I consider hard to get that level because inflation is controlled, interest rates still are low or we can say accommodative, corporate earnings are in good shape with expectations to be better, the U.S. economy is strong and the global economy is widening or broadening.

Dear traders and investors, the only real risk is the trade war escalating because the excellent projections of the corporate earnings growth for this and next year will disappear. I don't think that it will occur meanwhile I am a buyer on dips and I am clear that volatility will continue being present in the next weeks.

Good luck, viel Glueck, buona fortuna, buena suerte, bonne chance!
Ulises
                               

miércoles, 21 de marzo de 2018

Are the bears comming?

DJ Resistance:  26,616.71  All-time high
                           26,000
                           25,800.35
                           25,400
                           25,304       50 Days moving average
                           24,990       20 Days moving average
                           24,876       2017 peak
                           24,719       2017 close
                           24,280
                           24,100
                           23,912
                           23,600
                           23,400
                           23,382       200 Days moving average
                           23,250       Very strong
                           23,174
                           23,002       Strong, gap
                           22,890
                           22,795
                           22,420       Strong, breakout
                           22,119
                           22,000
                           21,912
                           21,600
                           21,535

Technical Analysis:
The market is phasing an interest hike and fears of a trade war.
The bears have reemerged and DJIA has broken important supports like 50 days moving average, DJ24,719 2017 close and DJ24,876 2017 peak. DJIA is below 20 and 50 days moving average which is bearish.
DJIA has formed a symmetrical triangle and is near of the vertex. Probably the next backdrop is an explosion to the up or down side. Pay attention to this formation. The negative trend line of the symmetrical triangle shows lower highs that is bearish.
DJIA is the weakest if you compare with the S&P and NASDAQ Composite.
In the short and mid-term the trend is bearish. DJ23,250 should be a strong support and hopefully the downside of the correction.
On the contrary, S&P is over its supports like 2017 close, 2017 peak and 50 days moving average showing an intact recovery attempt.
Please click over the chart to enlarge it.

 Fundamentals:
The market fears the Wednesday 3/21/2018  FOMC trade war and Facebook sell-off.
Personally, I think that the FED Meeting Announcement will raise the interest rates 25 basis points and this hike will calm down the markets. Trade war is different because it could affect the consumers. Facebook sell-off was originated due a bad press leak about customer data and millions of user profiles accessed by politicians. The Facebook stocks were sent down but it is a Facebook problem.
The hike of the rates will assure to the market the FED's confidence about the economy therefore I expect a bounce up of the market. The market is in a correction and consolidation phase, personally I expect DJ23,250 as a strong support in this phase but volatility is in place and it could be working for weeks.
Traders will pay attention to Fed's Chair Press Conference, it is the first one by the new Fed Chairman Jerome Powell after Janet Yellen.
Dear traders and investors, volatility is in the market and we have to live with it in the next weeks, hopefully not months. My suggestion is still "Buy the Dip".

Good luck, viel Glueck, buona fortuna, buena suerte, bonne chance!
Ulises

                       
                         

miércoles, 14 de marzo de 2018

NASDAQ new all-time high

DJ Resistance:  26,616.71  All-time high
                           26,000
                           28,800.35
                           25,516
                           25,316       50 Days moving average

 DJ Support:     25,000       20 Days moving average
                           24,876       2017 peak
                           24,505
                           24,280
                           24,100
                           23,912
                           23,600
                           23,400
                           23,250       Very strong
                           23,247       200 Days moving average
                           23,174
                           23,002       Strong, gap
                           22,890
                           22,795
                           22,420       Strong, breakout
                           22,119
                           22,000
                           21,912
                           21,600
                           21,535

Technical Analysis:
NASDAQ Composite has gotten a new all-time high and it is moving in uncharted territory with a solid up trend. S&P has broken up the negative trend line and it is over 50 days moving average, this last one is now a strong support. S&P trend is bullish but if it breaks down the 50 days moving average it could change, it should attack SP2,800.
DJIA has formed a symmetrical triangle and the index is still in, it has to break to the up or downside and explode. Next targets to the upside are DJ25,316 (50 days moving average), DJ25,316 and DJ25,800. DJIA trends to the upside in the mid and long term barring a violation at DJ23,250.
There is a "common gap" on Friday, normally that kind of gaps are filled. It is just below DJ25,000.

Please watch the chart where you aregoing to see the battlefield.
Please click over the chart to enlarge it.

Fundamentals:
Last week the market exploded due the excellent job report. The market is mixed during the last days. We can consider that is breathing before more gains. I think this is a profit taking and a reaction from the last uncertainties like the new Secretary of State.
February low seems to be the strong support for the correction. NASDAQ Composite has done new all-time highs, S&P is near its all-time high and DJIA is lagging but supported.
FOMC is for Mach 21st and I expect a probable 0.25 rate increase that could trigger an up move to the all-time highs.
The economy continues its positive path, corporations continue doing money, consumption is strong and the market looks bullish. But we have to pay attention to some instabilities like United Kingdom - Russia about the assassination of the ex-spy, it could escalate. It sems to me that volatility will be present for weeks.
Dear traders and investors, life is not easy and the markets are the same. I am still positive with the stock market and the U.S. economy therefore I expect 10 to 15% gains for 2018.

Good luck, viel Glueck, buona fortuna, buena suerte, bonne chance!
Ulises                    

miércoles, 7 de marzo de 2018

Dow Jones & S&P formed a triangle

DJ Resistance:  26,616.71  All-time high
                           26,000
                           25,800.35
                           25,500
                           25,309       50 Days moving average
                         
DJ Support:      24,876       2017 peak
                           24,719       2017 close
                           24,715.19  Support of old range
                           24,500
                           24,100
                           23,950
                           23,600
                           23,500       Gap upside
                           23,480       Gap downside
                           23,250       Strong
                           23,174
                           23,089       200 Days moving average
                           23,002       Strong, Gap
                           22,890
                           22,795
                           22,420       Strong, breakout
                           22,119
                           22,000
                           21,912
                           21,600
                           21,535       July peak

Technical Analysis:
The 2017 peak area has acted as support for DJIA and S&P. It has been reconfirmed as a strong support.
The range DJ24,719 (2017 close) and 24,876 (2017 peak) is the strong support for DJIA. The 50 days moving average at DJ25,245 was violated and now is acting as resistance at DJ25,309.
March start is volatile, DJIA and S&P have survived the test of the support at the 2017 peak and close.
A triangle is forming on the daily chart.
We conclude that the charts are irregular and the recovery attempt is still in the charts. The trend continues to be bullish although the last corrections.

Please click over the chart to enlarge it.

Fundamentals:
Some Trump's decisions are creating uncertainties in the financial markets. Uncertainty is terrible for these markets but that passed because what actually counts is the fundamental strength: economy and earnings.
Q4 earnings season was excellent, 2017 PBI growth was 2.5% and expectations for 2018 are 3% or more and it would be the best from 2005. FED Chairman Jerome Powell is enthusiastic around the U.S. economy in my opinion that explains what he mentioned about a possible 4th. rate hike in 2018. This backdrop puts us on the brilliant path.
Consumer Confidence index is at 130 from 2000 is the highest level. Consumer spending maintains a solid pace.
Certainly all of this boost a healthy economy. As I have explained the market is basing before the next leg up. This new base has to be solid and has have digested all the doubts about the spectacular market hike of 2017. My question is if DJ23,250 almost the low of this correction is the low boundary. In my opinion yes but we have to confirm it. I find the S&P well supported right now at SP2,700. This backdrop puts us on a brilliant path.

Dear traders and investors, I am still optimistic with the stock market and I think that the strategy is to continue to buy on the dips.

Good luck, viel Glueck, buona fortuna, buena suerte, bonne chance!
Ulises

miércoles, 28 de febrero de 2018

Nice spike

DJ Resistance:  26,616.71  All-time high
                           26,000
                           25,800.35
                           25,500

DJ Support:      25,400
                           25,245       50 Days moving average
                           25,080       20 Days moving average
                           24,876       2017 peak
                           24,719       2017 close
                           24,715.19  Support of old range
                           24,500
                           24,100
                           23,950
                           23,600
                           23,500       Gap upside
                           23,480       Gap downside
                           23,250       Strong
                           23,174
                           23,002       Strong, gap
                           23,001       200 Days moving average
                           22,890
                           22,795
                           22,420       Strong, breakout
                           22,119
                           22,000
                           21,912
                           21,600
                           21,535       July peak

Technical Analysis:
DJIA and S&P have had a nice spike sleeping two days over the 20 and 50 days moving average, this is bullish.
In the mid-February both indexes nailed a major support DJ23,250 and SP2,531 (200 days moving average and from them they bounced up to get the today's levels. The February low should be the bottom of this correction, there is not any confirmation at this moment.
Last week both touched major support 2017 peak DJ24,876 and SP2,695 and bounced up showing a constructive price action.
The trend is up and is streghten.

Please click over the chart to enlarge it.


Fundamentals:
Yesterday the market reversed earlier gains and ended the day with a loss due to Mr. Jerome Powell's comments to Congress, new Fed's President, about four interest rates hike during 2018 instead three as the market expected initially. It was based in his higher revised perspective on the economy. The market thought immediately that the stocks prices were confronted with higher interest rates and took profit.
This is not the case, we are facing an excellent outlook on the economy which is very positive for the corporations and consumers therefore I expect at least 10% gains this year. What the FED sees is a strong and growing economy in an excellent market conditions capable to swallow the interest hikes. The inflation rate is under control.
The market is basing as I have explained before and preparing for the next leg up. It is very possible to see great volatility on the financial markets in the next weeks and months before the up action. This volatility is necessary for the basing or process. The support at DJ23,250 is very important and it would determine if we have seeing the low of these consolidation.

Dear traders and investors, take profit of the pullbacks buying on the dips.

Good luck, viel Glueck, buona fortuna, buena suerte, bonne chance!
Ulises



                         

miércoles, 21 de febrero de 2018

DJIA over important resistances but retraced on Tuesday

DJ Resistance:  26,616.71  All-time high
                           26,000
                           25,500
                           25,410       20 Days moving average
                           25,212       50 Days moving average
                           25,000
                         
DJ Support:      24,876       2017 peak
                           24,719       2017 close
                           24,715.90  Support of old range
                           24,500
                           24,100
                           23,950
                           23,600
                           23,500       Gap upside
                           23,480       Gap downside
                           23,250       Strong
                           23,174
                           23,002       Strong, gap
                           22,941       200 Days moving average
                           22,890
                           22,795
                           22,420       Strong, breakout
                           22,119
                           22,000
                           21,912
                           21,600
                           21,535       July peak

Technical Analysis:
We have seeing an attempt to recover the way to the upside. The three indexes have bound from February lows, this bounce is still weak and feeble, we can witness new downwards move. The attempt to the higher label is constructing and possible repairs the chart damages, it is too early to define it. DJIA broke up clear strong resistance at DJ24,719 (2017 close) and 24,876 (2017 high). Now they are working as supports. DJIA and S&P are fighting with strong resistances right now.
DJIA mayor resistance is at DJ25,212 (50 days moving average) and the support is 2017 peak DJ24,876. This resistance and support are forming the range.
S&P, DJIA are retesting the 50 days moving, fundamental resistance.
The long trend is bullish.

Please click over the chart to enlarge it.

Fundamentals: 
Last week was impressive with six positive days in a row. Are we out of the woods? No, we are going to witness volatility in the next weeks and maybe months. The market is going to move higher and lower. What we have to determine is if the February low is the low of the correction. It is very possible. Pay attention to the market that is creating a new base before the next leg up.
The market is bullish, this is unquestionable and it is based on the tax cut, the solidity of the consumption and the strength of the economy.
Consumer Confidence rose to 99.9 from 95.7 previous month. E-Commerce retail sales at 3.2% quarter to quarter from 3.6% pace previous. Housing starts 1.326 million units annualized from previous months 1,192 units.

This correction was long awaited and now we have to live with it.
Dear traders and investors, keep calm and buy on the dips, do not lose these opportunities. Right now, with the economy, tax cut and the consumer's expectations we can foresee about10 to 15 % gains for 2018.

Good luck, viel Glueck, buona fortuna, buena suerte, bonne chance!
Ulises