Consistent bounce up?

DJ Resistance: 18,351     All-time high
                        18,206      Breakout
                        18,104      2014 peak
                        17,978      November peak
                        17,810
                        17,579      Inflection point
                        17,400      200 Days MA
                        17,125      Old support
                        17,050      Old strong support
                        16,933.43  September peak
                        16,667      Important for next leg up
                        16,172      Last week high

DJ Support:     15,980      Strong support
                        18,842
                        15,450      January low
                        15,370.33 2015 low

Technical Analysis:
What a Wednesday last week!
Important supports (DJ15,980, 15,651.51) were penetrated and DJIA bounced up in a lukewarm way but is it a dead cat bounce? It has to overcome DJ16,172, 16,593 and DJ16,667 to think about a possible chart repairs. The DJ15,370.33 support is vital and crucial for the market trend in the medium and long term.
The damage done during January requires the formation of a base which should take some time to aspire to a next leg up.
This correction is not enough, DJIA shows a bearish-leaning trend and is pending technical repairs if the trend is going to shift.

Please click over the chart to enlarge it.

Fundamentals:
What a last Wednesday!
Chinese weakness, oil demand and expectations have driven the market lately. Market thinks that the oil Chinese demand drive the oil prices, if Chinese GDP is lower than expected the oil demand would be weaker. Last Wednesday the Chinese stock market lost more than 6% in the session and the trade was stopped. From that day DJIA and S&P have bounced up more than 5%, what we don't know is if the beatings are truly over or the bounce up is a dead cat bounce.
Investors are going to pay attention to the economic news looking for the health of the economy, the corporate earnings (earnings season) and the outlook for stocks. We can speculate that the FED will not arise the interest rate this Wednesday afternoon. This Friday we are going to have the Q4 GDP announcement, market expect a weak figure but how much because an extremely weak figure could revive concerns about a looming recession. In my opinion U.S.A. and E.U. are not doing badly but the U.S. Dollar strength, the last week storm could be reflected in those figures and recession fears will be alive.

Dear traders and investors, there is no other way in these moments than to watch and follow the market. The trend has shifted in a bearish leaning but bulls still have technical supports. Fear is still rampant and as I have explained in the blog it could drive to lower stock prices.

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

Longer Trend?

DJ Resistance:  18,351      All-time high
                         18,206      Breakout
                         18,104      2014 peak
                         17,978      November peak
                         17,810
                         17,579      Inflection point
                         17,461      200 Days moving average
                         17,125      Old support
                         17,050      Old strong support
                         16,933.41  September peak
                         16,667       Important
                         16,232

DJ Resistance:  15,980       Very strong
                         15,842
                         15,651.51  Strong
                         15,370.33  Very strong

Technical Analysis:
The market is at the crossroads of change of trend in the long term. You can see in the last week 3 Years Weekly Chart the strong supports for DJIA, and S&P is almost the same with the strong support at SP1,860. DJIA at these supports shows weakness and the opportunity for a nice bounce to begin the repair of the charts. The bulls have a lot of harsh work.
First resistance is at DJ16,232 and the important is at DJ16,667. DJIA came down when broke important supports at DJ17,125, 17,050 and 16,933.41. This was a technically movement to the downside showing weakness and potentially trend shift in the long term.
DJ15,980 (August low) is a strong support, it worked well on Friday, Monday and Tuesday, the closing days were above it. That reconfirms its importance and existence.
Next light support is at DJ15,842, last week low.

Please click over the chart to enlarge it.

Fundamentals:
There is no relevant economic news this week except U.S. housing starts
Will hectic stock market of China affect the world?  This country is very special, government intervenes into it, the investors are locals and are subject of official propaganda. From 2009 China had three bear markets but without recessions while Occident was in a bull market, it is unique and good for China.
What do we have in front of us? Bear market losing about 30% maybe more, secondly bull market with a correction and third risk aversion that could generate a bear market or stock prices correction because investors consider that the prices are too high to buy them.
Dear traders and investors, in my opinion the backdrop is that the stock market is still in a bull market with risk aversion then the only possibility that we have is watching the market behavior and its developement.

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

DJIA, S&P, Nasdaq Composite showing weakness

DJ Resistance:  18,351     All-time high
                         18,206     Breakout
                         18,104     2014 peak
                         17,978     November peak
                         17,810
                         17,579     Inflection point
                         17,490     200 Days moving average
                         17,125     Old major support
                         17,050     Old strong support
                         16,933.43 September peak
                         16,667      Important

DJ Support:      16,410
                         16,232
                         15,980      Very strong
                         15,651.51  Important
                         15,370.33  Very important

Technical Analysis:
What a down movement almost 1,500 points of DJIA. S&P has done 10% correction.
Important supports have been broken DJ17,125 and DJ17,050. Volume came back and U.S.A. stock market entered in the earnings season with the 4th. Quarter results. ALCOA came better than expected that is positive.
The chart damages are so important, the bulls have to look for profound repairs before to expect for the next significant leg higher and it should take some time generating the base. We can anticipate a DJIA and S&P bounce up because both are oversold but the bias in the medium term is bearish.
It is hard to try to read the future what is clear is the bearish-leaning in the charts.

Please click over the charts to enlarge them.

Fundamentals:
Each year is unique and we have to measure it on its own merits and demerit. January first week was actually awful for the stock market. I find that U.S.A. and European Union economics are doing well. My worry is about fear, S&P 1,870 should be an excellent support but the dumb money, we are all in right now, could get scared and trigger a stampede sell-off.
The market is going to pay attention to the earnings season, oil, China, U.S. Dollar and FED guidance's in 2016 and especially during these first months of the year to try to build a backdrop for the year.
Dear traders and investors, the beginning of this year surprised all the market and we have in front of us a long year. Get ready!

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

Important supports worked well but DJIA bias remains bearish-leaning

DJ resistance:  18,351     All-time high
                       18,206     Breakout
                       18,104     2014 peak
                       17,978     Novemver peak
                       17,810
                       17,579     Inflection point
                       17,540     200 days moving average

DJ Support:    17,125     Confirmed support
                       17,050     Very strong
                       16,933.43 Strong
                       16,667     Strong
                       16,410     Light
                       15,980     Very strong
                       15,651.51 Important
                       15,370.33 Very important

Technical Analysis:
Few weeks ago I have indicated that the great support is DJ16,933.43-17,050, this was confirmed in the last two days. December low is DJ17,124 and January low DJ16,957.
There is a negative trend line coming from the all-time high DJ18,351 and the DJIA has done lower highs and lower lows from the November peak after the great rebound negating the August break down DJ17,579.
Although the Monday and Tuesday bounce up the DJIA bias remains bearish-leaning and charts need repairs to lift-off. For example to sleep over November peak DJ17,978.

Please click over the charts to enlarge them.

Fundamentals:
2015 is finished. It was a disappointed year for almost all the traders and investors. If you are breakeven you did well. The weakening corporate earnings were expected but the real issue was the oil and that the market did not expect its extreme weakening. Nobody anticipated it. The specialist expected a price between U.S. $60.- to 70.- after they were caught with the lower prices surprise, it went down until U.S. $34.65 per barrel and stays below U.S. $50.- per barrel. Traders are identifying lower oil prices with lower stock market prices, why? because lower oil prices would mean less investments, less new jobs besides decrease in current jobs, less consumption then less corporate sales.
China drop. The trigger was the factory data figures slowdown and the contraction of the U.S. Manufacturing. China is the second great economy country in the world. I agree with the Chinese investors sold out their positions because six months ago the government took measures to recover the drastic Chinese stock market fall. One of them was to have banned large stockholders (5% ownership or more) from selling their stocks in the stock market listed corporations. This ban is ending this Friday and regular investors' fears a stampede. Then they used the manufacturing figures as an excuse to download their positions.
Dear traders and investor, senior traders are coming back this week. U.S.A. is doing well and the quantitative easing in European Union is doing well its work. Then, I suggest you to wait until next week to see the stock market movement confirmation or rejection. We can assess the financial markets with an acceptable liquidity.

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