Bearish in the Mid Term

DJ Resistance:  26,616.71  All-time high
                           26,000
                           25,800.35
                           25,400
                           24,876       2017 peak
                           24,719       2017 close
                           24,623       50 Days Moving average
                           24,280
                           24,256       20 Days moving average
                           24,100
                           23,500
                           23,250       Very strong
                           23,174
                           23,002       Strong, gap
                           22,890
                           22,795
                           22,420       Strong, breakout
                           22,119
                           22,000
                           21,912
                           21,600
                           21,535

Technical Analysis:
False breakout of the negative trend line and the 50 days moving average, this action indicates the bearish-leaning trend in the medium term. S&P dis almost the same.
DJIA could not to penetrate de resistance DJ24,876 (2017 peak) and returned below its 50 days moving average (DJ24623). If you watch the S&P chart you will realize the same behavior.
DJIA has to close over DJ24,876 (2017 peak) to bring back the bulls.
The three indexes are below its 50 days moving averages and show a failed attempt to recover to the all-time highs.
DJ23,250 should be a strong and an extraordinary support. The correction range is DJ23,250 - 26,616.71
Following the negative trend line (watch the chart) the trend in the midterm is bearish.

Please click over the chart to enlarge it.

Fundamentals: 
The 10 year bond got 3% p.a. because sellers of bonds were active. That put the stock market in alert and we have witnessed how the bounce in April failed. Besides, Caterpillar showed excellent earnings in this first quarter with nice outlook in the future and announced that this one could be the stellar of this year that put the stock Caterpillar and the stock market in a sell mode.
We have to focus in the economy. Earnings season is excellent and we expect positive profits until the season's end. With the corporate tax cut the corporations foresees better benefits in the coming times and its expansions. Last GDP was 2.9% positive in the quarter. The economy is showing a vigorous job growth with low unemployment. The information that we are receiving indicates to us that we are in front of a bolstering economy with solid consumption and the consumer confidence almost in the highest levels.

Dear traders and investors, the market entered in a correction mode which is normal after the 2017 results. I had explained to you some months ago that the volatility would be with us in the next weeks and months. Economy is showing us the path to the expansion and very good times coming. That is what really counts. Concentrate in the facts, analyze them and buy the dips.

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

                         

Bearish Short Term

DJ Resistance:  26,616.71  All-time high
                           26,000
                           25,800.35
                           25,400
                           24,876       2017 peak
                           24,758       50 Days moving average
                           24,719       2017 close
                           24,319       20 Days moving average
                           24,280
                           24,100
                           23,514       200 Days moving average
                           23,500
                           23,250       Very strong
                           23,174
                           23,002       Strong, gap
                           22,890
                           22,795
                           22,420       Strong, breakout
                           22,119
                           22,000
                           21,912
                           21,600
                           21,535

Technical Analysis:
DJIA trend in the midterm is bearish. From April low the market has bounced up as a limited correction in these moments. We have to pay attention if we are going to get a follow through running to the 2017 close and high. Those are the real resistances. S&P and NASDAQ Composite reached them.
DJIA 200 days moving average, a long term indicator, is acting as a fabulous support and in the case of DJIA have never been violated from June 2016. Same index in S&P and Nasdaq Composite was violated but the closings are over it.
DJ24,719 (2017 close), DJ24,876 (2017 high) are the important resistances. Also DJ24,758 (50 days moving average) which is pointing down is a strong resistance.
DJIA to take a big step in repairing the charts has to sleep over the negative trend line.
February and March have damaged the chart and the attempts to the up side and get a correction have failed that is why the trend in the medium term is bearish and in the long run is bullish.

Please click over the chart to enlarge it.

Fundamentals:
The fear of a trade war triggers the sales off, Syria situation is acting against the financial markets due the uncertainties. I do not expect a trade war but global geopolitics and especially President Trump initiatives brings instabilities to the markets. I expect the volatility will continue.
The economy is in shape, the inflation is a little bit higher but controlled by the FED. The interest rates are increasing according to the FED´s plan and corporate earnings season is starting. I expect positive corporation numbers.

Dear traders and investors, I don´t want to write at length about why I am positive with the growth in the economy, corporate earnings, unemployment and consumption. The important is to determine the bottom of this correction, I still expect DJ23,250 as the strong support. The good days are coming and we will test the all-time high. Volatility will continue the next days and maybe weeks. Buy the dips!

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

Midterm Trend is Bearish

DJ Resistance:  26,616.71  All-time high
                           26,000
                           25,800.35
                           25,400
                           24,992       50 Days moving average
                           24,876       2017 peak
                           24,719       2017 close
                           24,500       20 Days moving average
                           24,280
                           24,100
                           23,431       200 Days moving average
                           23,250       Very strong
                           23,174
                           23,002       Strong, gap
                           22,890
                           22,795
                           22,420       Strong, breakout
                           22,119
                           22,000
                           21,912
                           21,600
                           21,535

Technical Analysis:
The beginning of the second quarter of this year continues showing the market deterioration.
200 days moving averages works as strong support and is valid at DJ23,431. Other strong support is DJ23,250. Those supports should contain the DJIA although the breakdown of the symmetrical triangle positive trend line. This last breakdown is bearish. The upside attempts have failed when they have tried to break the negative trend line of the symmetrical triangle.
Bulls have to put DJIA over the negative trend line (watch the chart) to repair the chart damages. Other way the trend will continue to the downside.
50 days moving average is pointing down and DJIA is below it same as 20 days moving average. That is bearish.
Bulls target are DJ24,719 (2017 close) and DJ24,876 (2017 peak). Those targets are necessary for the bulls to stabilize DJIA and look for a next higher leg.
S&P have almost violated 200 days moving average.
NASDAQ Composite is set to test 200 days moving average at 6,753.
Conclusion: short and midterm have a bearish trend.

Please click over the chart to enlarge it.

Fundamentals:
S&P 500 index P/E is below 17 times at SP2,600. It is very attractive especially with a growing economy, increasing corporate earnings therefore institutional investors should be looking for the best opportunities in the stock market.
President Trump is intervening in the financial markets with the trade war and accusing Amazon with the low taxes payed by the corporation and its distribution cost through the Post Office. We wait for the next meeting with the dictator of North Korea.

S&P should get SP2,298 to confirm a correction (20%) and to risk to enter in a bear market below this support. The current correction right now is less than 15%. I consider hard to get that level because inflation is controlled, interest rates still are low or we can say accommodative, corporate earnings are in good shape with expectations to be better, the U.S. economy is strong and the global economy is widening or broadening.

Dear traders and investors, the only real risk is the trade war escalating because the excellent projections of the corporate earnings growth for this and next year will disappear. I don't think that it will occur meanwhile I am a buyer on dips and I am clear that volatility will continue being present in the next weeks.

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