Red Flag for short term?

DJ Resistance:  18,351     All-time high
                           18,206     Breakout
                           18,104     2014 Peak
                           17,810    
                           17,760     200 Days moving averages

DJ Support:      17,579     March low
                           17,450     Five months low
                           17,050     Very strong

Technical Analysis:
DJIA is the weakest index. DJIA broke down its 200 days moving average, important indicator, its March low DJ17,579 and did a new five months low. This backdrop is worry because is showing a red flag indicating a possible shift of direction. What I read important in Tuesday's activity is that the closing was over DJ17,579 March low although yesterday's new five months low DJ17,400, that means an important recovery that we can interpret as a technical chart repair. To confirm it DJIA has to close over its 200 days moving average.
S&P has tested its 200 days moving averages and bounced up, support over that level restores the uptrend.
The consolidation range is DJ17,050-18,351
This year, 2015, is not easy to trade. DJIA has done new record highs but without follow through. Please watch the charts and you are going to realize that the DJIA is toppish but near the highs.
Medium and long term are still to the upside but the broke of 200 days moving averages could indicate an important correction or a shift direction. We have to pay attention technically that the last important correction was three years ago.
Please click over the charts to enlarge them.

                        
Fundamentals:
The panic selling of Chinese stocks is affecting the world stock market. The Shanghai Composite fell 8.5% on Monday, the maximum limit down of 10% was touched by a big number of Chinese corporations that are listed on that stock exchange. The fear about the increase of the interest rate in U.S.A. and the strength of the American Dollar also weigh on the financial markets.
But we cannot forget the earnings season, 125 corporations of the S&P 500 are going to show the results of the 2nd. Quarter together with about other 600 American corporations. Bulls are going to find excellent opportunities in the recent weakness of the market.
 This and next week is coming a bunch of economic news, for instance the Non-farm payroll and the unemployment rate are for next Friday. Today's FED statement is very important to define if the yesterday bounce up is a dead cat bounce or not.
Are the commodities at the bottom? It is a good question and the answer depends on China's effects. I think the the Gold target still is U.S.$1,000.- as I explained more than one year ago.
Dear traders and investors, times are stormy but we have to put fear aside and take our decisions with calm and rationality. I think that we can find excellent opportunities to buy in the recent weakness of the financial markets.

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

Summer Rally?

DJ Resistance:  18,351     All-time high
                           18,206     Breakout
                           18,104     2014 Peak

DJ Support:      17,810     Strong
                           17,740     200 Days moving average
                           17,579     Strong
                           17,465     5 Months low
                           17,050     Very strong

Technical Analysis:
NASDAQ COMPOSITE did new record high while DJIA and S&P could not break DJ18,103 (2014 peak) and SP2,130 resistances. These resistances are very technical. It could mean that the breakout for new record highs is not mature. The weakest index between the three is DJIA.
The trend remains firmly to the upside for medium and long term. For the short term the resistances are strong, possibly consolidation needs more time.

Please click over the chart to enlarge it.

Fundamentals:
We are in the earnings season and today was not good for the corporation's results. Apple shares went down 8% after quarterly results, GoPro 7% down and Chipotle 7% down too. MSFT (Microsoft) beat the estimates but lost 3.98% after hours. IBM and United Technologies also slide.
The most important corporate earnings are coming in the next days, they could give fuel to the stock market. Right now the three indexes are flirting with the upper bound.
Dear traders and investors, in my opinion the backdrop has two alternatives. First, positive earnings could boost the indexes to new all-time high. Secondly, weak or neutral corporate earnings will put the stock market in a defensive way and it is going to stay in the trading range DJ17,465-18,351 for a while, that means no summer rally and boring August. My comment goes about earnings season because it is the possible trigger in these moments.

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

Technically Well Supported

DJ Resistance:  18,351     All-time high
                           18,206     Breakout
                           18,104     2014 High

DJ Support:      17,810     Light but important
                           17,579     Strong
                           17,465     5 months low
                           17,050    Very Strong

Technical Analysis:
The strong support DJ17,579 prior last five months low was penetrated but the bounce up was done in a very constructive way by the bulls. The resistance at DJ18,810 and the 50 days moving averages (approx. 17,970) were surpassed and the market continued its way to the upside strongly looking for the resistance at DJ18,104 (2014 high) with determination. It also has to surpass the negative trend line (please, watch chart enclosed). It has rallied from five months low. This scenario is constructive and bullish for the medium-term.
DJ17,810 remains as important support.

Please, click over the chart to enlarge it.

Fundamentals:
Greek debt and Chinese stock market correction have generated a 200 days moving average test in the three indexes. That moving average was penetrated and the market bounced up which means that buyers were attracted. This shows that the uptrend is still in place for the medium term.
DJIA, S&P and NASDAQ COMPOSITE will try again the upper band of the trading range (DJ17,465-18,351) but I think more sideways.
This Wednesday and Thursday will be hectic because Mrs. Yellen visit to the Congress, she has to touch the interest rates, and the better than expected Chinese data, the Greek Congress should accept or refuse the terms of the bailout proposed by EU, FMI and European Central Bank, finally the meeting of the Central Bank of Canada about interest rates.
Dear traders and investors, DJIA is for new highs but needs more fuel. We are going to see it if the earnings season would be positive and if the Chinise stock market finds a bottom. Hectic days are in front of us.

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

Potential primary trend shift?

DJ Resistance:  18,351     All-time high
                           18,206     Breakout
                           18,204     2014 High
                           17,810     Light

DJ Support:      17,690     200 Days moving average
                           17,579     Strong March low
                           17,466     Today's low
                           17,050     Very strong

Technical Analysis:
Important support DJ17,579 is attacked by the bears. Market supported and bounced up with higher volume (please watch the chart).
DJIA is again over its 200 days moving average which is positive in the present circumstances. DJIA broke down this morning DJ17,579 but bounced up and closed the day in positive territory. The closing is the most important in technical analysis. A violation of the 200 days moving average and the strong support at DJ17,579 would shift the trend to the downside in the short term.
March and June low, approx. DJ17,579,
s the mayor support. The trading range DJ17,579-18,351 is still in play. A violation of the support would mean a primary trend shift.

Please, click over the chart to enlarge it.

Fundamentals:
Grexit is the theme and it would be in the next weeks, solution is not going to be found in two days.
Markets are discounting the Greece exit from Eurozone and European Union. If Greece accepts the Troika conditions it would be better for them, UE and in the world in general. In these moments Greece has weight in the European project but they can live without it. Greece is the two percent in the EU economy. For U.S.A. economy is not a problem but politically and strategically is important.
What I would stress is that the market supports are working, they are still in the range trading and the VIX is not high which means calm.
There is not too much to do until Sunday EU summit to decide if Greece stay or leave. EU and Troika should receive next Thursday the last Greek proposal to get a definitive agreement.
Dear traders and investors, the financial seas are turbulent these days and we can get surprises but at the bottom feels certain calm because this time there has not been surprises and European leaders are prepared and do not accept blackmail from the Greeks.
We wait for the 2nd. earnings season and do not forget the Chinese stock market.
Please, stay cool!

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