Still Bullish Bias

DJ Resistance:  18,351      All-time high
                           18,206      Breakout
                           18,104      2014 high
                           17,980      November 2015 peak
                           17,800


DJ Support:      17,579      Important inflection point
                           17,332
                           17,125      Very Strong
                           16,933.43 Strong September 2015 high
                           16,667      Inflection point
                           16,520
                           16,200      Light
                           15,980      Very strong
                           15,450      Strong
                           15,371.33 Very strong 2015 low

Technical Analysis:
DJIA and S&P stayed in the range-bound despite the fact that both made a new 2 months low, DJ17,332. The reverse confirms the importance of those supports. Next resistances are at DJ17,800 and 17,980.
Last week May low  DJ17,332 is at the trend line support (old negative trend line). The DJIA just closed below the 50 days moving average.
The three indexes are in a range-bound during May and technically indicate a bullish bias.
What is the direction of the market? Technically is to the upside but the range-bound should breakout and it could take the South way.


Please click over the chart to enlarge it.

Fundamentals:
There are not important economic news this week to try to break the range-bounds. Some specialists consider that the last up move is quite meaningful.
I was looking at the retail sales. 70% of the U.S.A. PBI is done by the consumers. The retail stores are giving some harsh announcements like Wall-Mart to close 269 stores, K-Mart 20 stores, JC-Penny 47, Aeropostale 84. That does not mean that the consumption is weakening, that means that there are adjustments and changements in the market. While department-store sales fell 1.7% in the last year, the online and catalog sales grew 10.2% in the last twelve months. Amazon reported Q1 earnings U.S.$1.07 and the market was expecting U.S.$0.67 per share. The consumption is strong and solid.
New home-sales crushed the market with 619,000 annual sales pace in April. It was the biggest monthly jump in 24 years, the market was expecting an annual pace of 525,000.
What I am trying to tell you is that economics are more in favor of the bulls right now.
Dear traders and investors, I still think that we need to be patients and wait for the breakout to jump in the bandwagon.

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

                         

Still bullish-leaning backdrop

DJ Resistance:  18,351      All-time high
                           18,206      Breakout
                           18,104      2014 peak
                           17,980      November 2015 peak
                           17,800    
                           17,579      Important inflection point
                         
DJ Support:      17,420      May low
                           17,400    
                           17,125      Very strong
                           16,933.43 Strong September 2015 high
                           16,667      Inflection point
                           16,520
                           16,200      Light
                           15,980      Very strong
                           15,450      Strong
                           15,371.33 Very strong 2015 low

Technical Analysis:
The stock market stays in a range and big mouvement should come when the range-bounds will be broken.
Today DJIA did a new May low but we can consider that the index is still in a range DJ17,400-17,980 and for the S&P 2,020-2,100. As the important supports worked well the bullish-leaning backdrop is still in place. The price action was technically, it is important to pay attention at today DJIA did the May low with the higher volume of the month. If the May lows would be violated with bigger volume should be considered as a possible turn to bearish bias.
Both DJIA and S&P are below 50 days moving average and over 200 DMA which should be a strong support.

Please click over the chart to enlarge it.

Fundamentals:
The oil price increase made the stock market party on Monday, but the falls of the stock market in the last days were driven by Apple.
Investors could not continue betting a higher stock market if oil prices increase because they expect more taxes, more goverment spending, more investment from oil corporations and bank failures avoided due the loans to the oil corporations. In the other hand the stock market valuation these days are based on low interest rates, if markets suspect an interest rates hikes glimpse the sell off begins inmediately. There are various theories about what happen and will happen in the market.
Dear traders and investors, my think is that the stock market is in a range and to get a mouvement the market needs to break the range-bounds. We are getting mixed news about the economy but the  news are more inclined with the bulls in these moments. Charts through technical analysis show a bull trend also. The breakout is coming in the next weeks. I could extend the spech about fundamentals but as the market is in range, it is better to be alert and ready for the mouvement.

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

DJ17,579 tested and bounced up

DJ Resistance:  18,351      All-time high
                           18,206      Breakout
                           18,104      2014 peak
                           17,980      November 2014 peak

DJ Support:
                           17,810
                           17,579      Important inflection point
                           17,485      April low
                           17,400
                           17,125      Very strong
                           17,933.43 Strong September 2015 high
                           16,667      Inflection point
                           16,468
                           16,200      Light
                           15,980      Very strong
                           15,450      Strong
                           15,371.33 2015 low

Technical Analysis:
The market has well supported the initial sell in May. The important supports DJ 17,579 (important inflection point) and SP2,040 reversed the downside move showing that those important supports worked and that the trend is to the upside. These bounces from these supports that are over the April low DJ 17,485 get to DJIA a technical bullish bias because could form a higher low in May with respect to April low. Next resistance is DJ17,980 and DJIA is over its three moving averages (20,50 and 200 days). The trend is to the upside in the medium term barring supports break down at May low.
DJIA is the strongest between the three popular indexes and the weakest is NASDAQ Composite.

Please click over the chart to enlarge it.

 Fundamentals:
The fundamentals that I wrote last week are the same for this one. Fund manager are rotating from soft growth stocks to those which have better expectations. This buy and sell maintains the market in a range, this is not a consolidation.
Technical analysis shows clearly a bullish-leaning for the medium term and the market is working very technically due the rotation and the earnings season expectation in July.
In the last two months the best place to be was in cash. Market needs more volatility and that doesn't like the investors. The market will wake up but when? I think it is for the coming earnings season. Do not forget that the five last consecutive earnings season were disappointed.
Oil continues leading the stock market, if it goes up stocks follow it. If oil goes down stocks do the same. The S&P range is SP2,040-2,100.
Dear traders and investors, keep calm, DJIA and S&P stay in the range and it is difficult to trade, the break of the range limits will bring the market next movement while technical analysis indicates an upward trend.

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

Sell in May and go away?

DJ Resistance:  18,351      All-time high
                           18,206      Breakout
                           18,167
                           18,104      2014 peak
                           17,978      November 2014 peak
                           17,810      Strong and important

DJ Support:      17,579      Inflection point
                           17,485.     April low
                           17,400
                           17,125      Very strong
                           17,933.43 Strong September 2015 high
                           16,667      Inflection point
                           16,468
                           16,200      Light
                           15,980      Very strong
                           15,450      Strong
                           15,371.33 Very strong 2015 low

Technical Analysis:
DJIA did a retracement like S&P looking to test the supports. Both have to overcome DJ17,810 and SP2,080 to be again in the bull way to the all-time highs.
DJIA has important supports at DJ17,650 (last week low), DJ17,579 (inflection point now support), and DJ17,125 (very strong support). S&P supports are SP2,052, 2,040, 2,020.
DJIA and S&P are consolidating before to try to visit the upper side of the charts. It could be in July with the earnings season.
The bullish-leaning bias is still in play for the long term barring a violation of DJ17,125.

Please click over the charts to enlarge them.

  
Fundamentals: 
May arrived and the market trend is bullish. From May to October the stock market gets its harder period of the year. Normally the stock market becomes weak in May and there is a summer rally in July with the earnings season, after that the market goes to the doldrums in August and the first two weeks of September.
FED is trying to avoid interest rates raise because the economy is not in the best shape. The corporate earnings are coming weaker during the last five consecutive quarters. What do explain the last rally born in February? The low interest rates that maintains a weak dollar and consequently the commodities stay stable and hectic. The low interest rates also allow the over-valued market. Following this idea we can anticipate that the fund managers will try to get cash selling part of their portfolios if S&P goes above SP2,100 in May and June.
European Union and Japan maintain low interest rates, we can think about negatives. If Fed raises interest rates the dollar will skyrocket affecting the week U.S.A. economics.
The bulls need the growth returns, better corporate earnings, solid consumption figures. If growth doesn't come back the risk of a bear market will be increased, watch the very strong support DJ15,371.33.

Dear trader and investors, DJIA did well looking for the all-time high but to reach it DJIA needs better economic health to advance further. For example the U.S. Manufacturing March good figure was reversed in April to 50.8.

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