No Christmas Rally

DJ resistance: 18,351    All-time high
                         18,206     Breakout
                         18,104     2014 peak
                         17,978     November peak
                         17,810   
                         17,579     Inflection point
                         17,541     200 Days moving average

DJ Support:    17,125     Strong confirmed
                        17,050      Very strong
                        16,933.43 September peak
                        16,667     Very strong
                        16,410     Light
                        15,980     Very strong
                        15,651.51 Important
                        15,370.33 Very important

Technical Analysis and Fundamentals:

Dear traders and investors, it seems that there is not enough steam for the waited Christmas rally. We have to pay attention to the slump volume next week due the senior managers' holiday. It could create the opportunity to try to reach the DJIA all-time high and also to look for the important supports. What I want to say is the real market would come again the January second week.
If you trade during these days the breaks should be confirmed in January.
Please watch supports and resistances to navigate taking into account during these time they could be penetrated easily.
I wish you: Merry Christmas and Happy New Year!
                  Happy Holidays!

Please click over the chart to enlarge it.

FED: Interest Rates Hike?

DJ resistance:  18,351    All-time high
                       18,206     Breakout
                       18,104     2014 peak
                       17,978     November peak
                       17,810  
                       17,584     200 Days moving average
                       17,579     Inflection point

DJ Support:    17,125      Strong confirmed
                       17,050      Very strong
                       16,933.43 Sepetember peak
                       16,667     Very strong
                       16,410     Light
                       15,980     Very strong
                       15,651.51 Important
                       15,370.33 Very important

Technical Analysis:
DJIA worked still in the small range but broke down the supports. Then we have to be alert.
DJ17,050 and DJIA 16,933.43 supports are very strong and DJIA over those levels is constructive and bullish-leaning barring a breakdown that could be catastrophic as I explained last week.
DJ17,579 and DJ17,584 (200 days moving average) are the inflection points, if the DJIA breaks up over them the trend in the short and long term are bullish.
DJ17,125 support was tested and confirmed yesterday (DJ17,138 low of the day), the index bounced up from this level.
DJIA is stronger in this moment than S&P and NASDAQ COMPOSITE.
S&P supports 1,993 (today's low), 2,020 and resistance 2,040.
Please click over the chart to enlarge it.

Fundamentals:
Well, interest rates will hike? This Wednesday is the day. Market has discounted the beginning of the interest rates hike in 9 years by FOMC. Personally, I am not sure but the majority of the experts expect this increase in December.
If the interest rates hike is done it will be minimal. The inflation is below 2% p.a., the FED's target is 2% p.a., thanks in part to the oil's low price. The U.S. Dollar should increase its value in front of the other currencies. From last year the U.S. Dollar has won 12% in value against to the Euro. This a good new for the American importers, U.S.A. inflation and a bad new for the debtors in the American currency like some emerging countries. The liquidity is going to be reduced that is bad for junk bonds.
I think the investors are rebalancing their portfolios rotating to strong and good stocks and selling junk bonds and buying Treasury and strong corporation bonds.
Dear traders and investors, I still count on the consumption and more after the Friday Retail sales figures. I find difficult a market revert after interest rates FOMC decision. That explains my position to be long over DJ17,050. For the moment there is nothing to do only wait for this Wednesday. I think the FED should raise the rates with a message that it is necessary and they are not going to disrupt the economy.

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

 

Dow Jones at a very important support

DJ Resistance:   18,351    All-time high
                         18,206     Breakout
                         18,104     2014 Peak
                         17,978     November peak
                         17,810
                         17,590     200 Days moving Average
                         17,579     Very important

DJ Support:      17,420     Last week low
                         17,410     50 Days moving average
                         17,210     November low
                         17,125
                         17,050     Very strong
                         16,933.43 September peak
                         16,667     Very strong
                         16,410     Light
                         15,980     Very strong
                         15,651.51 Important
                         15,370.33 Very important

Technical Analysis:
DJIA has worked in a small range during the last two weeks and it is supported by DJ17,210 (November low), DJ17,410 (50 days moving average) and DJ17,420 (last week low). If those supports are broken we have to put the alert. DJIA over DJ17,050 is constructive and bullish-leaning barring a breakdown that could be catastrophic. DJIA had a pronounced up spike in October that could explain the rest of the market in the last fifteen days.
DJIA and S&P have formed in the last five weeks a short term triangle doing lower highs and higher low, please watch the daily chart. The triangle breakout explodes. S&P important supports are 1,993, 2,020 and 2,040.
The positive and negative trend lines for the medium term are very clear in the chart.
The trend in the long run is bullish but Christmas rally seems not to come this year..

Please click over the chart to enlarge it.

Fundamentals:
Non-farm payroll was positive last Friday, earnings are neutral but not negative. We are going to continue getting economic news until next week when FED will decide about the interest raise which is discounted by the markets.
Tuesday's weakness was due to the crude oil's continued prices slide and the Chinese Trade Balance data that showed out a deceleration in the exports and imports affecting their economy. The Shangai index lost 2%.
The domino effect came to Europe and U.S.A.., especially in mining, materials and equipment firms. Technology and consumer oriented corporation are positive don't forget we are in holiday shopping season.
Dear traders and investors, we have worked a lot in this difficult year. I don't expect a Christmas rally for the end of the year, it could be. It seems to me that the year is going to close in the same level as the year started. Same for the S&P.

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

No Thanksgiving rally

DJ Resistance:  18,351     All-time high
                        18,206     Breakout
                        18,104     2014 peak
                        17,978     November peak important
                        17,914     Light but important

DJ Support:     17,810
                        17,680     Medium
                        17,596     200 days moving average
                        17,579     Very strong
                        17,210     Last bounce
                        17,125     Light
                        17,050     Very strong
                        16,933.43 September peak
                        16,667     Very strong
                        16,460     Light
                        15,980     Very strong
                        15,651.24 Important
                        15,370.33 Very important

Technical Analysis:
DJIA was in small range last week very well supported by DJ17,680, DJ17,579 and 200 days moving average. This shows a bullish-leaning for the short term. Last two weeks of trading were affected by terrorism in Paris.
The consolidation of DJIA over DJ17,050 and DJ16,933.43 (September peak) indicates bullish trend for the long run.
The attempt to DJ17,978 will gauge the bear-bull strength. Markets behavior on resistances are more significant than on supports.

Please click over the charts to enlarge them.

Fundamentals:
Retail sales of the weekend after Thanksgiving disappoints. The american consumers have stronger capacity to consume because the energy price fall, better incomes, no inflation and better consumer sentiment. But why did the sales disappoint? Because the consumers buy more through the electronic systems and they do that in the Christmas prior days. This is what I have realized last year.
This week and next we are going to get very important economic news like unemployment rate, non-farm payroll, factory orders and so on. These information is going to affect FED decision about the interest rate increase in December and next year.
Dear traders and investors, we entered in December and I expect a hectic month because all the economic news are going to be related to FED's interest rate increase and the possibility of a Christmas rally. I am positive with the stock market and I expect, for the moment, to have a rally in December based on the consumers which is important for the corporation earnings.

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