26,616.71 Old all-time high
26,277
26,000 Strong
25,805 50 Days moving average
25,368 20 Days moving average
DJ Support: 25,112 200 Days moving average
25,000 Gap upper side
24,876 2017 Peak
24,719 2017 Close
24,122
24,000 Strong
23,500
23,250 Very strong
23,173 Gap upper side
23,002 Gap down side
Technical Analysis:
Rally post-election petered out. DJIA stays over its 200 days moving average (long term indicator) while S&P and NASDAQ Composite have broken these important supports to the downside. S&P reversed from the defined resistance SP2,817.
DJIA did a November high and retraced from that level forming a negative trend line coming from the all-time high at the beginning of October. The chart shows the November high as a lower high which is bearish. This reverse filled the November gap which is constructive in the technical analysis. DJIA needs to be and sleep over the mentioned negative trend line to start to repair charts damages.
Technically is very important in these moments the bottoming of the three indexes. DJIA is the strongest between them.
The market's trend is bearish but with good supports. In the longer term we can say that the three indexes are in a range from January 2018. The DJIA consolidation range is DJ23,250 - 26,824.78.
Please click over the chart to enlarge it.
Fundamentals:
Statistics: After the last 18 midterm elections the stock market has increased a weighted of 17 % at the end of one year after them. Beside November and December are very strong months for the stock market after midterm elections.
Producer Price Index-Final demand report was up 0.6% month to month and 2.6% year to year minus Food and Energy.
Consumer Sentiment came at 98.3, it is strong.
The economy looks splendid and there is room until the end of 2019 and maybe more for spectacular corporate results.
The U.S. economy Achilles heel is the deficit. The tax cut should stimulate the economy to get strengthening and specially growth to grab a higher tax collection. The higher tax collection should cover the government loss due the tax cut and bring more economic resources.
Oil prices are plunging, that carries benefits for the consumers but not for the producers and other agents of the economy. It is not helping the stock market.
NFIB Small Business Optimism Index came at 107.4 which is near its highs.
Volatility is reigning in the day to day market's activity. President Trump domestic fights, international challenges bring uncertainties contribute strongly to volatility. But the economy is dazzling and that will deliver new historic highs to us.
Dear traders and investors, I am still optimistic with the stock market. I still believe that in the corrections is the opportunity to buy cheap and increase the portfolios with excellent prices.
Good luck, viel Glueck, buona fortuna, buena suerte, bonne chance!
Ulises
