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jueves, 21 de junio de 2018

Dow Jones at relevant support

DJ Resistance:  26,616.71  All-time high
                           26,000
                           25,835.35
                           25,500       March peak
                           25,086       May peak
                           25,000
                           24,924       20 Days moving average
                           24,876       2017 peak
                           24,719       2017 close
                           24,654       50 Days moving average
                           24,280
                           24,278       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 could not come across DJ25,500 resistance and it took a correction way. DJIA has gotten a three months high and turned back correcting the up move.
Don't forget that DJIA has formed a W BOTTOM with March and May low and the pivot is DJ25,086 (May high) with a target on DJ26,870. If the retracement continues could negate this formation but at the moment it is valid and is in play. The index is still raising from W BOTTOM establishing higher highs and higher lows.
DJIA came across the strong support DJ25,719 (2017 close) and now is supported by 50 days moving average at DJ24,654.
Support at DJ24,280 is an inflection point in the short and mid term. In the same periods of time the trend is still bullish.

Please click over the chart to enlarge it.

Fundamentals:
The trade war fears are weighting in the market. If you watch the chart you can realize that the bounces were stopped by geopolitical events.
In my opinion the market does not expect a trade war and believe in a North Korea denuclearization through an agreement.
The economy is doing very well plus the tax cut of the corporations will growth with investments done with the tax cut money spared and it will produce more and better jobs. The individuals tax cut will strengthen the consumption that will stimulate the corporations to produce more to satisfy their demand.
DJIA is down again due the trade war fears but the small-cups are higher in all-time highs. Why? the explanation is easy, normally small-cups depend on the domestic market and with the government stimulus in the economy they are not going to suffer with the trade war instead they will benefit from higher domestic demand. Small-cups Russel 2000 and NASDAQ Composite are in all-time new highs.
GDP 2018 second trimester estimated in +4.7% by the Atlanta Fed.

Dear traders and investors, I am still positive with the U.S.A. economy therefore I expect corporations' better business that will be reflected in the stocks prices. What worries me is that I don't know is the Mr. Trump government is following a clear and concrete plan or the government is reacting to the China, EU, North TLC, etc. responses to the U.S. government initiatives.

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





                         
                         

miércoles, 13 de junio de 2018

Nasdaq at New Highs

DJ Resistance:  26,616.71  All-time high
                           26,000
                           25,835.35
                           25,500       March peak
           
DJ Support:      25,086       May peak
                           25,000
                           25,902       20 Days moving average
                           24,876       2017 peak
                           24,719       2017 close
                           24,516       50 Days moving average
                           24,280
                           24,100       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:
June breakout seems supported. S&P is fighting with SP2,780 resistance (inflection point) and NASDAQ Composite is doing and keeping new high.
DJIA is over 20, 50 and 200 days moving average and broke out DJ25,086 (May peak) which is extremely bullish. Now the May peak (DJ25,086) should be a strong support, next is DJ24,876 (2017 peak) and DJ24,716 (2017 close).
DJIA has elongated its June break out when broke DJ25,086 (May peak). DJIA theoretically has formed a W with a double bottom market by March (DJ23,533) and May (DJ23,531) low. The breakout was done at DJ24,859 (April high) and this W has a target in the DJ26,100 area.
Now the stronger financial index is NASDAQ Composite.
Price action in the 3 financial indexes is notably bullish.

Please click over the chart to enlarge it.

Fundamentals:
Interest rates hike in 0.25% is almost sure done this afternoon after the FED Meeting. That will show the FED's confidence on the state of the economy. This pronouncement is for today at 2 p.m. o'clock.
There is nothing about the summit between Trump and Kim Jon Un but it was positive. Time will show if North Korea denuclearizes, that is the world's hope. In my opinion the meeting was a good first step.
The economy is in good shape, corporate profits are growing, consumer confidence at highs in the last 18 years.
Mythical investors like Dimon, Buffet, etc. have been lauded the behaviour of the market and the economy and they expect stocks moving higher.
Months before we have determined DJ23,250 as a decisive support for the bulls and we have expected high volatility during the months to become. Now, the moment for the bulls is coming with the second semester at view.
Dear traders and investors, we have worked all this volatility with calm and clear expectations, I am not sure if the volatility times are at the end but I am still bullish with the stock market and optimist with next semester.

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

jueves, 24 de mayo de 2018

Boring but bullish

DJ Resistance:  26,616.71  All-time high
                           26,000
                           25,800.35
                           25,400
                           25,000
                           24,876       2017 peak
                           24,719       2017 close

DJ Support:      24,619
                           24,500       20 Days moving average
                           24,440       50 Days moving average
                           24,280
                           24,100
                           23,978       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 is attacking DJ25,000 resistance. The mood and the technical are bullish. It is very important for the bulls to breakout DJ25,000 and it should be over DJ24,719 (2017 close) and DJ24,876 (2017 high).
The three indexes resilience and stability support the bullish bias.
It seems the DJ23,250 that we have outlined from March 2018 acts as very strong support for DJIA.
The breakout of DJ25,000 would confirm the double bottom defined by March and May lows approximately DJ23,500.

Please click over the chart to enlarge it.

Fundamentals:
Better than expected economic reports and records earnings project the stocks to higher prices. We are facing historic times for the economy and the markets. I am not showing the last economic reports but you can watch PMI Composite Flash report as an example. The problem comes from geopolitical issues, it brings uncertainty the principal enemy for the financial markets. We saw Israel using in its war the F-35 hunters, it is incredible, Iran agreement, North Korea meeting with President trump was cancelled, TLC in problems without definitions, the European Union no longer trust their ally from always U.S.A. and so on.
FED minutes from May 4th. calmed the markets about inflation and practically has ratified an interest increase for June.
In January and February we were very clear that the tax cut was bullish for the corporations and individuals, the corporate earnings were doing well and consumption was solid. All these is excellent for the economy and better times were coming. I also added that the uncertainty will be with us during the next months and the important was to define the bottom of the correction. It seems that we did well with DJ23,250 support.

Dear traders and investors, I don't want to take your time with a long explanation in detail about what I expect in the economy field for 2018 and 2019, my position is bullish until I find reasons and ground to change my expectations about the economy and the financial markets.

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

miércoles, 9 de mayo de 2018

Resistances under attackt

DJ Resistance:  26,616.71  All-time high
                           26,000
                           25,800.35
                           25,400
                           24,876       2017 peak
                           24,719       2017 close

DJ Support:      24,472       50 Days moving average
                           24,411       20 Days moving average
                           24,280
                           24,100
                           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 is near important resistances like the 2017 high DJ24,876 and 2017 close DJ24,719. S&P and NASDAQ Composite are almost doing the same. If they break those resistances the bulls would have an excellent opportunity to show their intentions.
Volume is weak in the last sessions.
In the short term the technical picture remains bearish-leaning. The important support area DJ23,250 - 23,500 stays unblemished.
 
Please click over the chart to enlarge it.
                       
Fundamentals:
President's Trump announcement about the Iran deal has not caused a great reaction. The financial market is acting all in stride like the oil market. It seems that the 90 days grace period eliminates uncertainty. Opinions are split if the decision is positive or negative for the United States.
The Redbook numbers for the retails stores showed the sales increase in the same stores with a y/y gain of 4.2% compared to last month's 3.5%.
The number of job opening in U.S.A. surged in March to a record 6.55 million from 6.1 million
Employment is in shape and the last economic reports show strength in the economy.

Dear traders and investors, there are uncertainties and new rules participating in the geopolitical, the financial markets doesn't like them but they have to live with. Economy and consumption are healthy therefore a rise in the market should be underway.

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

miércoles, 25 de abril de 2018

Bearish in the Mid Term

DJ Resistance:  26,616.71  All-time high
                           26,000
                           25,800.35
                           25,400
                           24,876       2017 peak
                           24,719       2017 close
                           24,623       50 Days Moving average
                           24,280
                           24,256       20 Days moving average
                           24,100
                           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:
False breakout of the negative trend line and the 50 days moving average, this action indicates the bearish-leaning trend in the medium term. S&P dis almost the same.
DJIA could not to penetrate de resistance DJ24,876 (2017 peak) and returned below its 50 days moving average (DJ24623). If you watch the S&P chart you will realize the same behavior.
DJIA has to close over DJ24,876 (2017 peak) to bring back the bulls.
The three indexes are below its 50 days moving averages and show a failed attempt to recover to the all-time highs.
DJ23,250 should be a strong and an extraordinary support. The correction range is DJ23,250 - 26,616.71
Following the negative trend line (watch the chart) the trend in the midterm is bearish.

Please click over the chart to enlarge it.
Fundamentals: 
The 10 year bond got 3% p.a. because sellers of bonds were active. That put the stock market in alert and we have witnessed how the bounce in April failed. Besides, Caterpillar showed excellent earnings in this first quarter with nice outlook in the future and announced that this one could be the stellar of this year that put the stock Caterpillar and the stock market in a sell mode.
We have to focus in the economy. Earnings season is excellent and we expect positive profits until the season's end. With the corporate tax cut the corporations foresees better benefits in the coming times and its expansions. Last GDP was 2.9% positive in the quarter. The economy is showing a vigorous job growth with low unemployment. The information that we are receiving indicates to us that we are in front of a bolstering economy with solid consumption and the consumer confidence almost in the highest levels.

Dear traders and investors, the market entered in a correction mode which is normal after the 2017 results. I had explained to you some months ago that the volatility would be with us in the next weeks and months. Economy is showing us the path to the expansion and very good times coming. That is what really counts. Concentrate in the facts, analyze them and buy the dips.

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

                         

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