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miércoles, 19 de octubre de 2016

Support worked

DJ Resistance:  18,668      All-time high
                           18,470
                           18,447      September gap unfilled
                           18,351      Old all-time high
                           18,442      50 Days moving average
                           18,247      August low

DJ Support:
                           17,995 - 18,016 Strong
                           17,700
                           17,579      August 2015 inflexion point
                           17,433
                           17,125      Very strong
                           16,933.43 Strong September 2015 high
                           16,667      Inflection point
                           16,520    
                           15,980      Very strong
                           15,450      Strong
                           15,370.33 Very strong 2015 low

Technical Analysis:
Although DJIA tried to break down the support at DJ17,995 getting DJ17,960 temporary, we can say that the area support DJ17,995 - 18,016 worked very well after a clear bounce up.
August low DJ18,247 is the next resistance and the most important for the bulls is DJ18,447 (September gap unfilled).
Technically, the market is supported and the bullish-leaning is still inviolate. If the support area is violated it would be a dangerous alarm risking a correction phase. The support area subsisted a second attempt and showed a bounce up.

Please click over the chart to enlarge it.

Fundamentals:
We are getting positive corporate earnings this season like Yahoo, Netflix, IBM, Goldman Sacks, Harley-Davidson, Johnson & Johnson, Morgan Stanley, in the other hands Intel shares felt almost 4%  and Halliburton following quarterly results. Not only that but also positive economic news: Retail Sales Report, Consumer Confidence got new high, Consumer Spending, Personal Income. Conversely, Consumer Sentiment sank to a 13 month low of 87.9 and Housing Starts tumble 9%.
Janet Yellen announced the FED risk waiting too long to increase the interest rates. FED is conscious about the inflation risk too but is clear to maintain the economy growing needs a steady and slow path for the increase of interest rates.
The good news and fundamentals weights over the negative but which one will prevail until the election end? We don't know what will happen after the elections because it is not only presidential, the parliament also takes part. If the president does not get the majority it would be very difficult  to fulfill the election promises.
Dear traders and investors, the market should stay in the range until the Election Day, the risk is if the supports do not work. My opinion is that after November 8 we are going to have a rally, possible for Thanksgiving. At that moment we are going to know the actual deep and force of the bulls. During these days I recommend to be in the defensive mood, take yours precautions.

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

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