Geopolitical

DJ Resistance:   17,151.57 All-time record high
                   17,130   All-time closing high
                   16,877
                   16,743   Strong May peak
                   16,588   Strong last year peak

DJ Support:         16,362       200 Days moving average

                             16,333.78   Last week low

                             16,015        Very strong

Technical Analysis:

Last week the 200 days moving averages supported de Dow Jones Index Averages at about DJ16,340 please watch the Daily Chart. Technically this is good for the Dow Jones because this indicator is respected by the market. The problem as I see is that the DJIA is still below DJ16,588 (last year peak). It has to overcome at least DJ16,588 resistance to look for stabilization. It is better to overcome DJ16,743 (May peak).

We have to pay attention to the volume. It decreased in the last two sessions.

The market shifted trend in the short term with the breakdown in the July last days but the trend is still up in the long term (watch the one year daily chart).

I expect to clear you with this panoramic vue. August is not an easy month to navigate and it is very probably that we are going to get hectic movements in the next four weeks due the low volume. It is not necesary deeper technical analysis.

Please click over the chart to enlarge it.

Fundamentals:

Geopolitical is heavy and press the market. The market is expecting important July economic news this and next week.

Investors are worried about inflation. The ten years bond is paying 2.42% p.a. which means that market is not expecting a rates hike by the Federal Reserve otherway it would be over 3% and maybe 5%. These low rates are excellent for the stock market and we could think about an uptrend of the stock market for the rest of the year.

Investors fears a correction due the last five years bull market. I agree with them in some moment we are going to see sells in the market. But for that we need to realise an increase in the ten year bond rate approaching to its rate average over 5% p.a.

Dear traders and investors, market fears a correction that would be very positive for the stock market. At this moment the facts are more for the upside although the short term trend but we are in the "Summer Doldrums" and we have to be alert to deal with any kind of movement.

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

Ulises