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