Dead-cat Bounce?

DJ Resistance: 18,351     All-time high
                          18,206     Breakout
                          18,204     2014 high
                          17,810     Important
                          17,579     Very important
                          17,050
                          15,850     Very strong

DJ Support:     15,370
                          14,500

Technical Analysis:
The damage inflicted in the charts from last week is considerable and the recovery is going to take time.
S&P and NASDAQ COMPOSITE have violated its 200 days moving average which is significant because these important supports broke down.
DJIA has lost from last top DJ18,104 (2014 peak) about 2,200 points. DJIA has lost about 2,900 points from the high of the year which means a 14.5% correction. Markets movement over 10% is a correction and 20% means bear market by definition. DJIA needs to stabilize over DJ17,579 breakdown and tested point, please watch daily chart. And break up DJ17,810 to look for a higher leg. DJIA closed today below DJ15,850 a strong support that shows weakness and put the index in the defensive way.
As we realised in the prior weeks, the DJIA was doing lower highs and lower lows, it was very clear in the charts, I read that S&P and NASDAQ COMPOSITE were ready to support DJIA but the Shanghai Stock Exchange sold off put the Global markets in a defensive mood.
The indexes charts are awful showing the fall in the last days.

Please click over the chart to enlarge it.

Fundamentals:
Dow and European markets are well but China is where the play is. U.S.A and Europe are going to be affected for what's going on in China. The last days fall are actually awful and the panic is in the stock market backdrop. This is diferent with what happened with Greece because of the size.
China has taken the correct measures to face the fall with delay. Right now the factor of confidence is in place, and investments = confidence is in all over the world.
Dear traders and investors, these moments are really hectic but we have to stay cool and rational. I think U.S.A. economy is in shape and EU is coming back its weak economy, Spain is growing over 3% p.a. Almost all the world commerce with China, emerging and frontier states need China demand for its raw materials and products. The markets damage done is there, this is the reality. Technical analysis shows the fall and indicate that a recovery is going to take time and efforts, and the possible bounces up could be "dead-cat bounce". On the fundamentals U.S.A and EU are in shape and they were doing positive before China's fall, Chinese authorities are taken measures to reestablish stabilization in the first step and growth after. Let's see the bottoming process without forgetting the emotional state of the traders and investors many of whom could try to sell in the bounces up.

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

August: technically still bullish

DJ Resistance:  18,351     All-time high
                           18,206     Breakdown
                           18,104     2014 high
                           17,810     Important last top
                           17,579     March low and important area
 
DJ Support:      17,400     July low
                           17,125     6 months low
                           17,050     Very strong


Technical Analysis:
S&P supported and bounced up from its important support at SP2,080 and 200 days moving average (200DMA) SP2,077 which is bullish because it means that buyers were attracted at those levels. NASDAQ COMPOSITE did almost the same and it is the strongest index between the three.
DJIA backdrop is the weakest but it bounced up with the other two. It is atop DJ17,400 old five months low that now acts as support. For DJIA is very important to close over DJ17,810.
DJIA is the only one which is running below 200DMA and 50DMA has crossed the 200DMA to the downside which should be bearish barring that DJIA is supported by S&P and NASDAQ COMPOSITE, they are over its 200DMA.
 The U.S. stock market behavior this year is toppish but still solid. S&P and NASDAQ COMPOSITE remian with neutral and bullish-leaning.
DJIA consolidation range is DJ17,050-18,351.

Please click over the chart to enlarge it.

Fundamentals:
Market was affected by Grexit, the fall of Shanghai Stock Exchange, Yuan devaluation, weaker Japanese economy, plunge of the oil and gold prices, neutral 2nd.earnings season of 2015, Brazil, all these in the last two months. With all these negative circumstances the stock market has supported in its consolidation range. I find this as positive.
August is not an easy month, senior traders are in holidays and market volume decreases during the summer doldrums.
We are going to face important economic news in the next two weeks and the market reaction is difficult to anticipate due the low volume.
Dear traders and investors, technical analysis still points to the upside and also fundamentals. I am still bullish but this time I am alert because the market direction can shift easily.

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

Well supported although China devalution

DJ Resistance:  18,351     All-time high
                           18,206     Breakout
                           18,104     2014 Peak
                           17,810     Last top and 200 days moving average
                           17,579

DJ Support:      17,400
                           17,279     Six months low
                           17,050     Very strong

Technical Analysis:
S&P and NASDAQ COMPOSITE supported over its 200 days moving averages. S&P has resisted the third attempt to breakdown the support at 200 days moving average, it shows its bullish bias barring a violation of this support. It means that buyers came in this important point. NASDAQ COMPOSITE still has its bullish bias and is the strongest index.
DJIA has tried to reverse from its six months low but it could not break DJ17,810 resistance. To recover a bullish bias DJIA has to stabilize over this level. DJIA is the weakest index and is doing lower highs with lower lows, which is negative.
We can conclude after technical analysis that the S&P with NASDAQ COMPOSITE remains resilient and they can bring support to the weak DJIA.

Please click over the charts to enlarge them.

Fundamentals:
Earnings season is almost gone and it didn't give us a summer rally. The stock market is going to move by the economic news and possibly by political during August with a low volume.
The long term bull market is toppish, watch the last seven months, but the upside bias is still in place.
August is the traders holidays time and it could be a boring month for the trading.
The market is evaluating how the China's currency devaluation is going to affect the activity, the Chinese Yuan has devalued 1.6 and 1.9%, Deutsche Bank is predicting the Yuan is overvalued by around 10%, so if the Yuan continues to weaken, the stock market should be affected. The rate increase should wait until the fourth quarter at least.
Dear traders and investors, it seems to me that we are going to navigate in the consolidation range during the next four weeks.This 2015 is very hard for the traders because it is toppish and stays into the range. My bias is still to the upside and don't forget that the long term bull market is still alive.

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

Technically still bullish, believe or not

DJ Resistance:  18,351     All-time high
                           18,206     Breakout
                           18,104     2014 Peak
                           17,810     Last top & 200 days moving average

  DJ Support:    17,400     Five months low
                           17,050     Very strong

Technical Analysis:
DJIA is the weakest index at the moment. It bounced up from its five months low DJ17,400 to the important resistance DJ 17,810 and 200 day moving average, same with 20 and 50 days moving averages, and it could not break up. Immediately DJIA retraced and today closed at DJ17,551. This movement shows weakness for DJIA but it remains in its consolidation range DJ17,050-18,351. If you watch the daily chart you will realize that in the last 3 months DJIA did lower highs which means red alert flags for DJIA in the short term. Also DJIA is toppish in the last 6 months. Is it bearish or we are next to face a bear market?
Conversely the S&P and NASDAQ COMPOSITE have a different backdrop, they supported over its 200 days moving averages, important support and guide which indicates long term trend. S&P is also toppish in the last 3 months and NASDAQ COMPOSITE did higher highs in the last 5 months.
What I read is that although the DJIA weakness the other 2 indexes maintain its bullish bias and barring they break down their supports, S&P2,080 and 2,070 200 days moving average. If they have enough steam to try the upper side, they will draw the DJIA.

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Fundamentals:
Apple and commodities are playing in the last ten sessions of the market, they reflect weakness. Apple has dropped 10% and has entered in a correction territory. Apple is 4% of S&P and 14% of NASDAQ COMPOSITE.
Growth in China and Shanghai Stock Exchange weigh into the market action. Greece is still in play.
Earnings season did not bring fuel for a summer rally. We have to pay attention to the economic news that are coming in the next fifteen days. This week the ADP employment on Wednesday, the unemployment rate and Non-farm payroll on Friday are going to rule the activity.
Dear traders and investors, the growth in China affects almost all the world, if they produce less they demand less, that affects the commodities prices, the commerce and so on. EU is still fighting with Greece but they are doing better, specially Spain, it is growing over 3% p.a. Brazil is in big troubles, Argentina and Venezuela are not left behind. Financial markets are ready to go into the Summer doldrums and are well supported. What I am trying to tell you is that those doldrums are welcome but we have to be alert because it would be easy a change in the market trend with the summer volume. Panic would be desastrous.

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