Dow Jones times of consolidation

#DowJones  #Stockmarket

DJ resistance :  16.576.66  All-time closing high
                           16.520       Strong
                           16.300
                           16.250

DJ Support:       16.174       November peak
                           16.103
                           16.040
                           15.721       Very strong
                           15.340.23  Strong

Technical Analysis:
Dow Jones Industrial Average broke up DJ16.174 (November peak) and DJ16.250 but closed at DJ16.204.40 on Monday. The DJ is in consolidation times, we didn't get an explosion to the upside after it broke resistance at DJ15.721.
The DJ is lagging with respect to S&P and NASDAQ. I think de S&P is ready to break its all-time high, but if not we could be in "dead cat bounce". Please watch the S&P chart in the last week blog.
The S&P did new all-time high on Monday and retraced bellow support SP1.848 on Tuesday. Next support is DJ1.828. NASDAQ has rallied to its best level in fourteen years.
Let's say that the S&P technically is doing well, that explains its possibility for new highs.
The market moved a good volume on Monday and failed to close over important resistances broken. That could mean weakness because after a big battle the bulls couldn't maintain its conquests.

Please click over the charts to enlarge them.

Fundamentals:
I am very pleased to have reed weeks ago that the DJ was entering a phase of consolidation which have taken place.
We faced some weak economic news like consumer sentiment, but other are positive. U.S.A. and EU economies are growing. They have taken decisions to correct its weakness and hopefully we are going to see encouraging results. For next week we have the unemployment and non-farm payroll figures, those are very important for the market direction . Do not forget that regularly January is positive for the stock market and February and March loose.
I am still optimistic with the stock market and the recovery of the economies in U.S.A. and EU, for example Spain is improving, they have adjusted down wages which has resulted in increased exports because they are more competitive and you can see their exports figures in the last two months.

Dear traders and investors, I feel very sorry for the delay, I had some problems with the installation of the new internet equipment.

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

Ulises

Consolidation?

#DowJones  #StockMarket

DJ Resistance:    16.766    All-time closing high

                              16.520   Strong (bears-bulls battlefield)

                              16.250   Light but the begining of upside move to the highs

                              16.174   November peak

          

 DJ Support:         16.103   50 days moving average

                              16.040   Light (Wednesday last week high)

                              15.950

                              15.721   Strong (approx. August, September, October peaks)

                              15.516   200 days moving average

                              15.345

Technical Analysis:

Has it corrected the market? It seems that. I would have preferred a correction more profound to achieve prices more realistic after the 2013 big bounce. And to get out the weak investors who panic in a backdrop. We needed a 10% correction at least; Dow Jones Industrial Average got 7%.

I thought about a consolidation after the bounce over DJ15.721 last week. The DJ is lagging in this up move therefore we have to pay attention to the S&P1.850.54 all-time high, that is its technical test, and it is very important for all the market. S&P great support is at SP1.813. NASDAQ is the leader right know but for us the S&P is going to light the path. If S&P overcome that level the index would be facing a beautiful "V" reversal. NASDAQ has the same "V" reversal potential. You can see them in the daily charts.

The S&P and NASDAQ are in a clear momentum uptrend, also de DJIA but lagging.

Please click over the charts to enlarge them.

Fundamentals:

According to the technical analysis the market could be in the threshold of a strong up move. NASDAQ and S&P are ready for a positive break up. They have to penetrate their resistance; if they failed the market could be again in a correction.

Fundamentals are contradictory, the last economic news disappointed like jobs,  Empire State Index, housing starts and so on, but in the other hand, fund's managers are slowly increasing their overweight allocation toward U.S. equities and pulling out from global emerging markets according to the Bank of America Merryl Lynch survey of managers for February. Also retail sales decreased but consumer confidence sentiment index are positive.

U.S.economy is growing in a better way than two years ago. The European Comunity zone seems to have gotten the bottom. Some emerging countries are doing very well but almost all depend on China.

Increase of confidence and spending is necessary to get significant growth in 2014.

Dear traders and investors, the bottom line is that the data that we are receivings is contradictory, we have to see carefully them in the next one or two months to determine the market trend.

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

Ulises

Thank you FED

DJ Resistance:    16.766     Al-time high close
                              16.520     Resisted four attemps
                              16.250
                              16.092     50 days moving average

DJ Support:          15.943
                              15.700     Strong (battlefield)
                              15.445     200 days moving average
                              15.345     Last week low
                              15.100
                              14.760     Strong (old range 14.760-15.721)

The bulls took the reins again with a sharp rally from the lows.
The Dow Jones Industrial Average rallied significantly in the last four sessions exceeding the stabilization limit level DJ15.721 and pointing up with an acceptable volume but not as it was in the downdraft. Not only that, also exceeded DJ15.943 light resistance.

DJ15.700 is the bulls-bears battleground. The bulls prevailed over the bears this time conversely to last weak.

Possibly we are facing a bullish sharp "V" reversal atop DJ15.721. There is not confirmation at this moment but "V" could be forming, please watch the daily chart.

NASDAQ turned positive for 2014 as far. Neither DJIA nor S&P are positive this year.

DJ is over 200 days moving averages which is very positive for bulls especially as 200 days moving average demonstrated strong support last weak. Traders and investors consider the 200 days moving average as an indicator for the long term market trend.

Dow Jones Industrial Average is still in a bull market. It has to stabilize over DJ15.700 and 200 days moving average. Technical analysis points out for the long side at this moment. DJ16.520 should be a target and there we are going to realize if new highs.

Please click over the chart to enlarge it.

Fundamentals:
I believe that the American economy is on the path of growth to 2014 and 2015. It is very important to make it over the 3% per year so reactive consumption.
The ghost of the debt ceiling is transferred to 2015. One obstacle less to strengthen the economy, the Executive has no excuse to not work on the economic recovery, is there where it must concentrate and look for job creation.

Ms. Janet Yellen, Federal Reserve Chairwoman, announced her commitment to maintain low interest rates and to use bond buying or taper to stimulate the economy. Thank you very much FED! we owe today's extraordinary rally.

Late February and March are usually loose for the stock market, no more earnings seasson. These week and next one we will see important economic news that should act as catalysts for the market. It is in positive mood and I expect stabilization. I prefer the long side over DJ15.700.

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

Ulises

What a correction!

DJ Resistance:   16.677     All-time close high

                           16.520

                           16.250

                           15.943

                           15.700     Old support now strong resistance

                           15.482     Tuesday’s high and 200MA

DJ Support:        15.350     Tuesday’s low

                           15.100

                           14.760     Old range 14.760 – 15.721

Technical Analysis:

What a correction!

DJIA is in a correction. We must try to find out if it was enough to stabilize and look for the next up move because DJ is still in a bull market. DJ has lost 1.216 points from almost an all-time high during 2014. It is 7.3% and it could be easily 10% pullback. By definition, a bear market is at 20% or more pullbacks. The last 10% correction in the Dow Jones was in 2011 and it is healthy because of the realignment of stock prices. 

The volume has increased in the last fifteen days and the bears have imposed to bulls its direction of the market. Support at DJ15.700 was shooting down during a big fight; see daily chart volume, resulting to the DJ lost 300 points in one day. Bears won that important battle. Now DJ15.721 is a strong resistance. DJ needs to overcome that level and stay over to begin to stabilize. In the short term the DJIA have to exceed Tuesday’s high and the 200 days moving average (approximately DJ15.483).

Technically, we have to watch the market forces because it is complicated to determine the market direction right now. The bull market is still in place by definition. The correction is welcome but we don’t know where its limit is and it is irresponsible to affirm something without a base. It is clear that at DJ14.760 there is a strong support and below it we would be possibly in a bear market. Do not forget the positive trend line support coming from March 2009 in the daily and weekly chart and DJ is still in the uptrend channel coming from the same date.

What I read is that Dow Jones is still in a bull market after technical analysis.

Please, click over the charts to enlarge them.

Fundamentals:

As I explained last week, the DJIA below DJ15.700 is in a correction and in a negative place. I also explained the motifs for the correction, they are still valid.

It is not clear if the last trading days are going to shift the market direction. We have faced some disappointments during this earnings season but some reasonably positive impressive too, the economy is doing well and it seems growth is for 2014 and 2015. Debt ceiling gridlock looms in February, I think this time Congress and Executive are going to get an agreement. I admire the U.S. Corporations’s rationalization they have got in the last five years; they are healthy and competitive and they did it without the economy’s help. Try to imagine those corporations working in a recovery environment.

Positions in shares have increased markedly last year,margin debt at the New York Stock Exchange rose to an all-time high, Margin debt at NYSE hit record at $444.3 billion in December 2013

Dear traders and investors, regularly January brings gains for the stock market, February and March lose conversely. 2014 began breaking this way, January was negative and the stock market lost its gains done in November and December 2013. If we enter in a correction phase it could last two months as history suggests, it is not written in stone. We have to continue working into the market and find the horizon.

Do not lose the objectivity, put emotions aside!

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

Ulises