DJ17,700 Support is Holding

DJ Resistance:  18,351     All-time high
                           18,206     Breakout
                           18,103     2014 peak
                           17,995     Negative trendline
                           17,925     Breakdown

DJ Support:      17,699     Last 2 months support and June low
                           17,635     200 days moving average
                           17,579     Very strong
                           16,990     Very strong

Technical Analysis:
DJIA is in the range bound and the first important support DJ17,699 is working well during the last 8 weeks. It contained two strong attacks, One last week and the other this one.
The intermediate trend is still bullish but we are facing some weakness that could help to violate this first important support.
Small range to pay attention is DJ17,699-17,925.
Supports should draw buyers. Usually May and June volume is lighter than July.
Bullish trend is still in place.
Please, click over the chart to enlarge it.

Fundamentals:

Grexit (Greece) continues dominating the market sentiment and news. Positive housing starts, building permits and Tuesday and Wednesday Fed meeting weigh over the financial markets.
Q1 earnings season is almost out and Q2 earnings season is coming in about 3 weeks. Market expects a reduced corporate earnings for the Q2.
I would point the market resilience support 10-year Treasury note yield's recent spike and the concerns over a potential Greece-debt default.
The stock market needs a new catalyzer to breakout to a new historical high, it could come through Q2 earnings season. Are we going to have a summer rally?
Dear traders and investors, I expect the stock market to stay in range-bound trading during the next two weeks. We could get surprises during this time. It is hard to define the market direction in the next 15 days because the long time in the range due the lack of catalyst to move the stock market in any direction. Please stay cool and do not take emotional decisions.
Good luck, viel Glueck, buona fortuna, buena suerte, bonne chance!
Ulises

Strong Support Tested

DJ Resistance:  18,351     All-time high
                           18,206
                           18,103     2014 Peak
                           17,925

DJ Support:      17,715     Tuesday's low
                           17,615     200 Moving average
                           17,579     Very strong
                           16,990     Very strong

Technical Analysis:
DJIA did May low and touched support at DJ17,750. Resistance is at DJ17,925. June downturn gave a two months closing low. The bounce up is constructive for the bull case, my worries come from the support touched and buyers were not attracted, please watch the volume in the chart. The support is still valid at DJ17,715 (today's low).
DJIA maintains itself in the trading range DJ17,579-18,351 and now is testing supports. This support is very important, below it the market could get a correction because it would be confirmed as a "lower low". Supports DJ17,579 and DJ17,615 (200MA) should attract buyers and generate a bounce up. The selling pressure below record high is considered constructive after technical analysis. Technical analysis in its pure sense does not show a DJIA trend this year, I touch this point because the breakdown of DJ17,579 could be considered as an extension of time of the consolidation range (DJ16,990-18,351) by some analysts.
The bullish trend is still in play.
Watch today's "Doji"
Please, click over the chart to enlarge it.

Fundamentals:
Good economic news are seeing as the catalyzer for rate hike and strong dollar instead of a solid economy. Watch what happened last Friday with the unemployment, the market immediately sold stocks fiering higher rates and a king dollar.
I expect more positive economic news enough strong to push up the stocks but for the moment I suspect the stock market will stay in the range bound trading given the mixed interpretation of the news by the investors.
Dear traders and investors, these markets require patience and avoid to lose the control of the emotions. Remember, we trade and we have to have the emotions controlled. That is the only way to get rational decisions and to be in control all the time.

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

Depthless retracement mantains up trend

DJ Resistance:  18,351     All-time high
                           18,206     Breakout
                           18,103     2014 peak

DJ Support:      18,010     50 Days moving average
                           17,925  
                           17,750
                           17,600     200 days moving average
                           17,579     Very strong
                           16,990     Very strong

Technical Analysis:
Technically the trend is up although the depthless retracement. DJIA maintains itself in the high range, 50 days moving average and DJ17,925 confirmation as support are constructive for the bull case.
There is a recent negative trend line from the DJ18,351 all-time high that is working as resistance, please watch the chart.
The great supports are DJ17,579 and 16,990, below them we could get an important correction of the market.
Please watch the chart where you are going to see the consolidation range, supports and resistance very clear. And please click over to enlarge it.

Fundamentals:
The summer season for the stock market started unofficially this week.
The mixed economic news continue to flow, Chicago PMI came this Friday showing a scary 46.2 (negative under 50) and the ISM Manufacturing report on Monday shows an acceleration to 52.2 from 51.5. If both were under 50, specialists could begin to speak about possible recession.
Personal Income improved but consumers are not spending more. Factory orders slipped 0.4%, it is the eight negative month in the last nine. U.S. house-price gains accelerate.
Rumors about rate hike for September, you can imagine how strong dollar could affect exports. I rule out interest hike for the third trimester barring U.S.A. gets a big increase in the consumption.
Dear traders and investors, are we going to have a Summer Rally? Expect more stock range bound for the moment.

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

Alertness

DJ Resistance:  18,351     All-time high
                           18,318
                           18,206     Breakout

DJ Support:      18,004    50 Days moving average
                           17,910
                           17,750
                           17,579     Very strong
                           16,990-17,050 Very strong

Technical Analysis:
DJIA did new all-time high last week and then pulled back to the trading range. The last week breakout was without follow through. This is the market behavior in the last five months. The volume is not accelerating during the breakouts.
DJIA has an important support at DJ18,004 (50 days moving average) and at DJ17,910.
The medium and long term trend is to the upside. In the short term the DJIA is in a trading range DJ17,579-18,351.
Please click over the chart to enlarge it.

Fundamentals:
DJIA got its new all-time high amid non convincing economic news especially in the manufacturing sector. That could explains the lack of follow through besides the earnings season is almost gone.
The investor's optimism means that they expect this news as transitory, they are going to be solid in the future. The VIX, complacency, could be interpreted in the same way.
The interest rates are actually low and the stock market is a better place to invest. Foreign exchange market is agitated with the U.S. dollar revaluation and still energy markets don't end to accommodate.
Dear traders and investors, I tried to explain that May is not an easy month to trade. Anf besides the failure to get intense activity in new territories put us in a defensive mode. Please be cautious and pay attention to economic news, I think the correct strategy for May is lighten the portfolio.

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

Bull Market: we could see higher mouvements

DJ Resistance:  18,351        All-time high
                           18,318.39   All-time close
                         
DJ Support:      18,206       Breakout
                           18,054-18,103  2014 peak
                           17,910
                           17,750
                           17,579       Very strong
                           17,510     200 days moving average
                           16,990-17,050  Very strong

Technical analysis:
DJIA got new all-time high and close this Tuesday. Those are very constructive for the possible next up leg.
Strong support should be at DJ18,206 breakout point.
Consolidation range is DJ16,990-17,050 to 18,351.
DJIA is breaking out in a boring way in the last six months, let's say they are sluggish with low volume and after them, market retraces. There are not explosions when the DJIA breaks out.
Dow Jones is to the upside and very well supported, we should see positive legs.
Stay long over DJ17,579.

Please click over the chart to enlarge it.

 
Fundamentals:
The economic news and the corporate earnings are weaker than we have expected and the stock market continues to go up in a sluggish way during these last six months or during 2015.
Bull market means that stocks goes up, it is necessary a recession or something like that to change that tendency. That could explain why the stock market maintains its up movement although the the light weak data.
 I could list the last data like the industrial production reported last Friday and consumer sentiment but I think that you know it very well.
Dear traders and investors, my opinion is that the up trend will continue, May is hard to trade for me but I think it is time to lighten long positions. If we are going to have a Summer Rally we need better corporate earnings and that would reflects better jobs.

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

Still possible a breakout

DJ Resistance:  18,289     All-time high
                           18,206     Light
                           18,054-18,103  2014 peak

DJ Support:      17,910     Light
                           17,750     Strong
                           17,579     Very strong
                           17,425     200 Days moving average
                           16,990     Very strong
                           15,854     Very strong

Technical analysis:
DJIA is still in the range. Important is that it looked for its support at DJ17,750 and bounced up looking for the last resistances. It got DJ18,206. For technical analysis what counts is the market facing resistances. We witnessed that when DJIA looked for the final resistances, the volume decreased and buyers were not attracted.
I indicated in the chart the two ranges that are in play, and showed the almost seven year's bull market.
The charts are clear that the trend is up but in the last weeks DJIA is toppish, maybe trying to rest.
A violation of DJ17,579 and 16,990 will put us in alert.

Please click over the chart to enlarge it.

Fundamentals:
We realized at the beginning of April that the economic news and the corporate earnings were not enough robust to bring DJIA to new territories. Then, we were looking for a possible catalyzer to bring it to the unknown territories always with the conviction that the indexes were well supported as they are in did.
What we have to consider to trade in May and June are: interest rates, 10 year Treasury bond went higher to 2.27% from February low. China, its economy is weak and the market fears a stock and real states bubble because of its great debt. Foreign exchange war or crises, strong dollar attempts against U.S. exports. Stock market, bull market is still in play, please watch the chart.

Dear traders and investors, indexes are near their all-time highs and the market will try again to breakout them. If buyers would be attracted, the attempt will be succesful. It seems to me that May and June could be neutral months and in July the market could define its direction. For the time being let's watch the stock market, over DJ17,579 stay long.
Good luck, viel Glueck, buona fortuna, buena suerte, bonne chance!
Ulises

Sell in May and go Away?

DJ Resistance:  18,289     All-time high
                           18,054-18,103   2014 peak

DJ Support:      17,750     Light
                           17,579     Strong March low
                           17,420     200 Days moving average
                           16,990     Very strong
                           15,854     Strong

Technical Analysis:
DJIA is challenging the 2014 peak that is working as a robust resistance, DJ18,054-18,103. Support is at DJ17,750.
The trading range for the last three months is DJ17,579-18,289, if the index stays in, it is constructive for the bull case.
DJIA is weaker than S&P and NASDAQ Composite. Are they going to draw DJIA or this last one is going to take them down?
The charts are clear pointing up and sustaining the bulls. I interpret that the market is resting and preparing its next up leg.
The consolidation range is the same DJ16,990-18,289. If the supports DJ17,579 and 16,990 are percolated then we are going to face a healthy correction.

Please click over the chart to enlarge it.

Fundamentals:
Sell in May and go away? Statistically May to October are a little hard to trade but it doesn't mean that they are negative.
As explained in the prior blogs, the weak economic news and the disappointed earnings during this season couldn't bring the indexes to uncharted territories. For that the indexes need another catalyzer that could be the unemployment rate and the Nonfarm payroll this coming Friday.
Dear traders and investors, remember, fundamentals lead the way. Without a genuine and positive catalyzer, the robust resistance could put the market in the defensive way, let's say that DJIA could look for the range supports. Don't be discouraged!
Good luck, viel Glueck, buona fortuna, buena suerte, bonne chance!
Ulises