Translate

miércoles, 24 de mayo de 2017

The Trend is Bullish





Pardon me for not updating my blog but I'm currently in Florida visiting my children and grandchildren. Also, I injured my right arm at home and this makes it very difficult to write.

I will try to update it by May 31st.

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

Ulises

miércoles, 3 de mayo de 2017

NASDAQ new record highs

DJ Resistance:  21,169       All-time high
                           21,115       All-time record close
                           21,100       March peak

DJ Support:      20,909       Top of the gap
                           20,850
                           20,776       50 Days moving average
                           20,720       20 Days moving average
                           20,600       Negative trend line
                           20,410       Strong March low
                           20,125       January peak
                           20,000       Very strong
                           19,800
                           19,732
                           19,678       January low
                           19,400      200 Days moving average
                           19,200
                           18,800
                           18,668       Old all-time high
                           18,247       August low
                           18,000
                           17,833.23  November low (Trump rally)
                           17,579       Inflection point
                           17,125       Very strong

Technical Analysis:
DJIA and S&P have stayed over the negative trend line breakout which is supportive for the indexes and bullish. The trend line acts as support now DJ20,850. DJIA and S&P did a Gap in the April late, the top of this gap also acts as support DJ20,909. The next resistances are the all-time close high DJ21,115 and the all-time high DJ21,169.
The NASDAQ Composite has done seven straight new all-time highs, DJIA and S&P have broken up the negative trend line and have done a gap (top of the gap DJ20,909). They have slept over it during five straight days which is supportive and bullish forming a tightened range.
On May first begins the worst seasonally six months for the stock market, "sell May and go away".
In technical analysis what important is the behaavior of the stock market facing resistances and it seems that there is not selling pressures. Said that, the trend is bullish-leaning barring a violation of DJ20,000.

Please click over the chart to enlarge it.


 Fundamentals:
May first is the beginning of the worst season for the stock market statistically until September.
Earnings season is positive, the corporations are doing well, this is the best earnings season in two years, conversely the Q1 GDP was weak +0.7%. The explanation is that the global economy is rebounding, Europe is growing slow but growing and their last manufacturing index hit the highest level since 2011. Japan, parts of South America and even China are showing growth. About 38% of the earnings season of S&P 500 come from outside of U.S.A.

In the U.S.A. market is expecting important economic data like ADP Employment and ISM Services, Non-farm payroll, unemployment rate. If positive data arrives could bolster the growth trend that we have witnessed in the previous months.

The three scenarios that the stock market is facing are: break over SP2,400 and DJ21,169, second consolidation below those levels and third is a correction. In my opinion the first two scenarios are more possible by large.

Dear traders and investors, maybe it is the time to rotate part of your portfolio to European stocks. The best location for 2015 and 2016 was the U.S. stocks but if the U.S. growth slows it would be convenient to have part of your portfolio in Europe. I stay bullish at this time.

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

miércoles, 26 de abril de 2017

NASDAQ 6,025 New Record High

DJ Resistance:  21,169      All-time high
                           21,115      All-time record close
                           21,000      March peak

DJ Support:      20,850
                           20,758    
                           20,741      50 Days moving average
                           20,649      20 Days moving average
                           20,410      March low
                           20,125      January peak
                           20,000      Very strong
                           19,800
                           19,732
                           19,678      January low
                           19,370      200 Days moving average
                           19,200
                           18,800
                           18,668      Old all-time high
                           18,247      August low
                           18,000
                           17,833.23 November low (Trump rally)
                           17,579      Inflection point
                           17,125      Very strong

Technical Analysis:
Tuesday's close is the April's highest for DJIA and S&P. The important point is that the negative trend line was broken by DJIA and S&P. The bullish triangle (watch last week and today's chart) formed with the negative trend line and the line support DJ19,410 has worked technically and the up move is strong and has formed a bullish gap.
NASDAQ COMPOSITE has got a new all-time high which is very bullish for the market.
This up move is going to have bullish consequences if breaks DJ21,000 and SP2,388 mid-March high for both.
The two indexes have closed again atop their 20 and 50 days moving average (DJ20,649 and 20,741, SP2,360 50 days moving average) which is bullish technically because what it counts is the market behavior against the resistances.
Resistances for DJIA are DJ21,000, DJ21,115 (all-time close) and 21,169 (all-time high)
The trend in the three terms is bullish-leaning.

Please click over the chart to enlarge it.

Fundamentals:
French election clarified that France is going to stay in the European Union (EU),that allowed the stock market advance on Monday and Tuesday.
The next pace is understand what Trump and his team are going to do. The economy and the corporations are doing well, we can confirm it with the corporate earnings that we are witnessing in the last days. The more pro-growth would be the White House and Congress the higher stock prices would take place.
Trump has announced for Wednesday 26/4 a new tax plan which he called "...bigger, I believe, than any tax cut ever". If he convinces investors that indeed this is the pro-growth that he has promised, the stock market will look for the all-time high. When he announced it last Wednesday the U.S. stock market came down. Investors are going to analyze in detail the plan and its possibilities of the willingness of Congress to vote into effect. The idea of a greater deficit scares investors.
There are other geopolitical problems like North Korea.

Dear traders and investors, if the market considers viable the Trump tax plan we will see soon S&P over SP2,400 and DJIA over DJ21,169.

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

miércoles, 19 de abril de 2017

Support DJ20,410 still in place

DJ Resistance:  21,169      All-time high
                           21,000
                           20,850      Gap closed
                           20,758
                           20,665      50 Days moving average
                           20,620      20 Days moving average
                         
DJ Support:      20,410      March low
                           20,125      January peak
                           20,000      Very strong
                           19,800
                           19,732
                           19,678      January low
                           19,290      200 Days moving average
                           19,200
                           18,800
                           18,668      Old all-time low
                           18,247      August high
                           18,000
                           17,833.23 November low (Trump rally)
                           17,579      Inflection poin
                           17,125      Very strong

Technical Analysis:
Big battle below 50 days moving average, DJ20,665 and SP2,353. Next important supports are DJ20,410 (March low) and DJ20,000. For S&P are SP2,322 and SP2,300.
We are witnessing an April downturn in the stock market but important supports as explained are working. There are damages, for example DJIA and S&P are below 50 days moving average, but indexes are contained over its supports. The consolidation phase is in the way and the market needs to breakout the negative trend line and close over it to. The negative trend line and the support line formed at DJ20,410 could be forming a bullish triangle. We will see!
DJIA and S&P are still bullish-leaning barring the violation of DJ20,000.

Please click over the chart to enlarge it.

Fundamentals:
Finally earnings season arrived, that could be the fuel to look for the all-time high. Until this moment the results are mixed to negative.
Last week was negative for the market and on Monday we got a bounce, DJIA lost 113.64 points on Tuesday. The interpretation of that could be that the bounce was a dead cat's bounce and the market will continue forming a lower leg or the supports are tested by the bears. DJIA and S&P are closing below its 50 days moving average during 4 consecutive days which is a sign of more downside in the short term.

Dear traders and investors, in my opinion the DJIA is in a consolidation phase as I have explained in my prior blogs where I have indicated that the all-time high is far away. The risk is a weak May if the corporate earnings are not as expected and if the geopolitical complications remain. The trend in the mid-term is to the upside and the short term could be bearish therefore the long and mid-term investors should stay long and buying into the dips.

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

miércoles, 12 de abril de 2017

Still at Major Support

DJ Resistance:  21,169      All-time high
                           21,000
                           20,850      Gap closed
                           20,758
                           20,720      20 Days moving average

DJ Support:      20,625      50 Days moving average
                           20,512.56 Tuesday low
                           20,410      March low
                           20,125      January peak
                           20,000      Very strong
                           19,800
                           19,732
                           19,678.     January low
                           19,220      200 Days moving average
                           19,200      Strong
                           18,800
                           18,668      Old all-time high
                           18,247      August high
                           18,000      Strong
                           17,833.23 November low (Trump rally)
                           17,579      Inflection point
                           17,125      Very strong

Technical Analysis:
Dow Jones and S&P are testing again the important support 50 Days moving average, DJ20,625 and SP2,348. A violation of it would be considered weakness and next support would be DJ20,410 (March low), DJ20,125 and 20,000 should support the index. A violation of DJ20,410 would put the midterm in a bearish mood, which means a change of the actual bullish trend.
If the 50 days moving average support the indexes, the bullish trend is intact.

Please click over the chart to enlarge it.

 Fundamentals:
This is an important week for believers.
The question that I receive constantly is about the first quarter trend continuation. It is impossible to define because I am not a guru. Based in the global economy, it is growing (German Investors Confidence ZEW is strongest since mid-2015 from 12.8 to 19.5) and the U.S. corporation earnings are coming solid and expected to maintain this rhythm in at least two quarters more tell me that the stock market would evolve positively in the medium term. That doesn't mean that in the second quarter the stock market will get new all-time high. It seems that in the very near future we are confronting some irregular ups and down coming from the Congress debates and the geopolitical uncertainties like SYria, Russia, North Korea and Iran.
Dear traders and investors, I am still positive with the stock market for 2017. My advice is "stay the course" and buy in the deeps always following your portfolio investing objectives and what your risk tolerance allow.

HAPPY EASTER!

HAPPY HOLIDAYS!

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

miércoles, 5 de abril de 2017

Bullish Trend Unbroken

DJ Resistance:  21,169      All-time high
                           21,000
                           20,850      Negative trend line & Gap
                           20,790      20 Days moving average
                           20,758

DJ Support:      20,592      50 Days moving average
                           20,410
                           20,125      January peak
                           20,000      Very strong
                           19,800
                           19,732      Strong
                           19,678      January low
                           19,200      Strong
                           19,190      200 Days moving average
                           18,800
                           18,668      Old all-time high
                           18,247      August high
                           18,000      Strong
                           17,833.23 November low (Trump rally)
                           17,579      Inflection point
                           17,125      Very strong

Technical Analysis:
DJIA and S&P have retraced from their new all-time highs. The 50 days moving average have acted as support and are doing an excellent job. Technically this is bullish and that is the trend barring a violation of them.
Next resistance is DJ 20,758 and DJ20,850 is the most important target for the bulls. DJ20,410 and DJ20,000 should be strong supports for the index. Equivalent for S&P are SP2,342 (50 days moving average) and SP2,300.

Pleasde click over the chart to enlarge it.

Fundamentals:
S&P500's P/E is higher at 22 times but not at 30 which is the prelude for sell-off or the end of bull markets. In economy a decent P/E and a normal yield curve indicates a good behavior of almost all the components that affects the economy. Right now those indicators are in good shape, the three rate hike to 1.75% p.a. FED's target is discounted with a positive view, let's say accommodative. To top a bull market the economic recession and an inverted yield curve have to be present, that is not the case.
Consumer spending is in a good shape after Dallas FED President Rob Kaplan (last week on Thursday).
Bearish are expecting a correction about 5 or 6% for May, it could be done but it would be positive for the stock markets because it would clear the stock prices, adjusting positions and bring the opportunity to buy cheap and build solid portfolios.
Next week we will be visited by earnings season, best corporates earnings are expected. They could bring the 2017 P/E below 20 times for the end of the year.

Dear traders and investors, financial markets are not easy, we have to be aware and alert every minute of our lives. My opinion is still positive with the stock market and buy the deeps.

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

miércoles, 29 de marzo de 2017

Supports at Work

DJ Resistance: 21,169      All-time high
                          21,000
                          20,820      20 Days moving average
                          20,743

DJ Support:    20,600
                         20,470      50 Days moving average
                         20,410
                         20,125      Strong January peak
                         20,000      Very strong
                         19,800    
                         19,732      Strong
                         19,678      January low
                         19,200      Strong
                         19,090
                         19,080      200 Days moving average
                         18,800
                         18,668      Old all-time high
                         18,247      August high
                         18,000      Strong
                         17,833.23 November low
                         17,579      Inflection point
                         17,125      Very strong

Technical Analysis:
Supports DJ20,400 and SP2,331 equivalent to 50 days moving average worked well and indexes bounced up. The trend in the near trend is in a consolidation phase but in the mid-term is bullish-leaning. It seems that the consolidation phase has still to run before to go over the next resistances and look for a new all-time high.
The late price action in March is technical and it is very difficult to determine the next walk of the DJIA and S&P, what shows clearly is that is forming a consolidation pattern.
The break through SP2,351 and DJ20,600 show weakness in the indexes in the short term. The recovery we saw this Tuesday is very positive but this time the market needs a consolidation phase.

Please click over the chart to enlarge it.

Fundamentals:
This retracement or correction of the market is very important because the movement is technical and in the subjective field some uncertainties about Trump's capacity to apply his reforms like healthcare, taxes and infrastructure have weighted. But these gridlocks are still in place with fascinating expectations in the economy during 2017.
The economy is doing actually well, Consumer Confidence exploded to 125.6 level not seeing from the year 2,000 which reflects solid expectations for income and jobs, Retail Sale Data is lagging. Pending home sales jumped in February, US Home prices hit 31 months in January: Case-Schiller, US trade deficit declines in February, etc. Watch this coming Friday Consumer Sentiment.
S&P retraced to technical supports and bounced up, it is technical and orderly. That no means that market is going immediately to the all-time high, I warned you that support will be tested furiously, the market is in consolidation and would need more fuel like earnings season which is coming in the second week of April.
Dear traders and investors, 2017 looks illuminated for the stock market, I am still very positive with the market. Try to stay long and buy in the deeps. We are watching and looking the market, if there is a change in the direction we will warning you.

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