DJ Resistance: 21,169 All-time high
21,115 All-time record close
21,100 March peak
DJ Support: 20,909 Top of the gap
20,850
20,776 50 Days moving average
20,720 20 Days moving average
20,600 Negative trend line
20,410 Strong March low
20,125 January peak
20,000 Very strong
19,800
19,732
19,678 January low
19,400 200 Days moving average
19,200
18,800
18,668 Old all-time high
18,247 August low
18,000
17,833.23 November low (Trump rally)
17,579 Inflection point
17,125 Very strong
Technical Analysis:
DJIA and S&P have stayed over the negative trend line breakout which is supportive for the indexes and bullish. The trend line acts as support now DJ20,850. DJIA and S&P did a Gap in the April late, the top of this gap also acts as support DJ20,909. The next resistances are the all-time close high DJ21,115 and the all-time high DJ21,169.
The NASDAQ Composite has done seven straight new all-time highs, DJIA and S&P have broken up the negative trend line and have done a gap (top of the gap DJ20,909). They have slept over it during five straight days which is supportive and bullish forming a tightened range.
On May first begins the worst seasonally six months for the stock market, "sell May and go away".
In technical analysis what important is the behaavior of the stock market facing resistances and it seems that there is not selling pressures. Said that, the trend is bullish-leaning barring a violation of DJ20,000.
Please click over the chart to enlarge it.
Fundamentals:
May first is the beginning of the worst season for the stock market statistically until September.
Earnings season is positive, the corporations are doing well, this is the best earnings season in two years, conversely the Q1 GDP was weak +0.7%. The explanation is that the global economy is rebounding, Europe is growing slow but growing and their last manufacturing index hit the highest level since 2011. Japan, parts of South America and even China are showing growth. About 38% of the earnings season of S&P 500 come from outside of U.S.A.
In the U.S.A. market is expecting important economic data like ADP Employment and ISM Services, Non-farm payroll, unemployment rate. If positive data arrives could bolster the growth trend that we have witnessed in the previous months.
The three scenarios that the stock market is facing are: break over SP2,400 and DJ21,169, second consolidation below those levels and third is a correction. In my opinion the first two scenarios are more possible by large.
Dear traders and investors, maybe it is the time to rotate part of your portfolio to European stocks. The best location for 2015 and 2016 was the U.S. stocks but if the U.S. growth slows it would be convenient to have part of your portfolio in Europe. I stay bullish at this time.
Good luck, viel Glueck, buona fortuna, buena suerte, bonne chance!
