Interest rates: Ahead of the FED

DJ Resistance:  18,351     All-time high
                           18,206     Breakout
                           18,104     2014 high
                           17,810     Important
                           17,579     Very important
                           17,050     Strong
                           16,667    Upper side trading range

DJ Support:     16,210     Light
                          15,980     Lower side trading range
                          15,651
                          15,370

Technical Analysis:
DJIA stayed in the trading range DJ15,980-16,667 waiting for the FED decision. The limits of the trading range are clear. S&P did the same and both indexes are attacking the range top but it seems that the sellers were drawn on the resistance levels. Its technical bias points to the low side barring a close over DJ16,667.
DJIA needs to atop DJ17,579 to show solid chart repairs.

Please click over the chart to enlarge it.

Fundamentals:
The U.S. economy and global economy, specially China, Japan and emerging markets like Brazil are driven the financial markets. U.S.A. is doing well and recovering, summer payroll, retail and construction reports show positive path. Q2 2015 GDP grew 3.7% and consumption did +3.1% in the same period. , that is positive for the stocks but markets don't trust China recovery.
Dear traders and in investors, volatility, up and downside, will continue in the next weeks. Correction has ended? We don't know. It is very hard to time the market. We have to follow the ups and down movement and when we'll have the bottom confirmation we should buy and take the bargains. Right now I don't recommend to chase bargains. Market is expecting FED meeting on 16th. and17th. September and its decision about the interest rates increase. Next meeting are in October and December. Personally, I think the rate increase should be for December if there is.

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

Ups and Downs

DJ Resistance:  18,351     All-time high
                           18,206     Breakout
                           18,104     2014 peak
                           17,810     Important
                           17,579     Very Important
                           17,050     Strong
                           16,640

DJ Support:      15,980
                           15,850
                           15,370

Technical Analysis:
The damage caused in the charts is clear and needs time for the repairs. Last week has created a new trading range DJ15,980-16,640.
For the bulls, the trade over DJ17,579 and 17,810 is very important. And for the bears is the trading below 15,850.
The long term bull market is still in place because the support has worked. In the short an medium term the trens is bearish and it could be worst. If the DJIA stays over DJ16,000 we could conclude the chart repairs are on the way.

Pleaswe click over the charts to enlarge them.

Fundamentals:
The market is receiving the pressure from China (Yuan, growth, stock market), Greece, emerging markets (especially BRICS countries), FED, etc. The volatility (see VIX) in the last four weeks caused fear and panic to the traders and investors. Investors doesn't like fear and it is difficult to endure or support those emotions especially when you are losing money.
The fresh economic news are going to continue coming but the most important for September is the FED interest rates increase decision next week. September is the worst month of the year for the financial markets.
Dear traders and investors, September is going to be very volatile, we are going to be in the money some days and others losing it. I still think that the U.S.A. economy is positive and the EU is recovering in a slower pace. The DJIA, S&P and NASDAQ COMPOSITE are in a correction phase. In my opinion the pros are higher than the cons and we should see a bounce before the year's end. But We have to be alert and ready to take dramatic decisions if the direction of the market shifts. Remember, the most important is to preserve the capital.

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

Bearish Backdrop

DJ Resistance:  18,351     All-time high
                           18,206     Breakout
                           18,104     2014 high
                           17,810     Important
                           17,579     Very important
                           17,050     Strong
                           16,640

 DJ Support:     15,850     Strong
                           15,370

Technical Analysis:
DJIA broke support at DJ16,460 approximately which is bearish and that indicates a possible shift to a bearish long-term direction. The S&P did the same with its support at SP1,970.
The 10 years monthly chart shows that the long term bull market is at its last and important support, please watch the chart.
The damage in the charts are considerably and is going to take time the repair of them.
September is beginning and volume is coming. The saucer pan formed on the toppish top is clear and the trend is bearish not only for the short term barring support at DJ15,850 works well and produces a bounce up. The resistance at DJ17,579 is the line to confirm the chart repairs are on the way.

Fundamentals:

I expect positive economic news from U.S.A. on productivity, manufacturing, service and employment.

This Friday would be the center of this week expectations with unemployment figures, non-farm payroll expected 213,000 new jobs by average economist. On Wednesday we will receive the ADP jobs, it should be positive, some speak about solid rock.

The last correction of the market was in 2012, S&P corrected 10% between April and June something like 32 days. We got calm during the last 3 years. The correction is healthy for the market prices and it will put out the loose hand investors.

Volatility, ups and downs, is going to be present in September. China puts nervous all the markets, affects and drives the stock exchanges markets.

Dear traders and investors, I am still positive with U.S.A. economy and stock market, European Union is doing better, the damage in the market needs repairs, September should begin with it. Then we have to expect volatility during this month. Please stay cool, stick to your plans, this correction is positive for the financial markets, I expect the rates rise for the end of the year, I told you at the end of 2014 that they were for September at least. If the support breaks down we can get a deeply shift of the market direction.

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

Dead-cat Bounce?

DJ Resistance: 18,351     All-time high
                          18,206     Breakout
                          18,204     2014 high
                          17,810     Important
                          17,579     Very important
                          17,050
                          15,850     Very strong

DJ Support:     15,370
                          14,500

Technical Analysis:
The damage inflicted in the charts from last week is considerable and the recovery is going to take time.
S&P and NASDAQ COMPOSITE have violated its 200 days moving average which is significant because these important supports broke down.
DJIA has lost from last top DJ18,104 (2014 peak) about 2,200 points. DJIA has lost about 2,900 points from the high of the year which means a 14.5% correction. Markets movement over 10% is a correction and 20% means bear market by definition. DJIA needs to stabilize over DJ17,579 breakdown and tested point, please watch daily chart. And break up DJ17,810 to look for a higher leg. DJIA closed today below DJ15,850 a strong support that shows weakness and put the index in the defensive way.
As we realised in the prior weeks, the DJIA was doing lower highs and lower lows, it was very clear in the charts, I read that S&P and NASDAQ COMPOSITE were ready to support DJIA but the Shanghai Stock Exchange sold off put the Global markets in a defensive mood.
The indexes charts are awful showing the fall in the last days.

Please click over the chart to enlarge it.

Fundamentals:
Dow and European markets are well but China is where the play is. U.S.A and Europe are going to be affected for what's going on in China. The last days fall are actually awful and the panic is in the stock market backdrop. This is diferent with what happened with Greece because of the size.
China has taken the correct measures to face the fall with delay. Right now the factor of confidence is in place, and investments = confidence is in all over the world.
Dear traders and investors, these moments are really hectic but we have to stay cool and rational. I think U.S.A. economy is in shape and EU is coming back its weak economy, Spain is growing over 3% p.a. Almost all the world commerce with China, emerging and frontier states need China demand for its raw materials and products. The markets damage done is there, this is the reality. Technical analysis shows the fall and indicate that a recovery is going to take time and efforts, and the possible bounces up could be "dead-cat bounce". On the fundamentals U.S.A and EU are in shape and they were doing positive before China's fall, Chinese authorities are taken measures to reestablish stabilization in the first step and growth after. Let's see the bottoming process without forgetting the emotional state of the traders and investors many of whom could try to sell in the bounces up.

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

August: technically still bullish

DJ Resistance:  18,351     All-time high
                           18,206     Breakdown
                           18,104     2014 high
                           17,810     Important last top
                           17,579     March low and important area
 
DJ Support:      17,400     July low
                           17,125     6 months low
                           17,050     Very strong


Technical Analysis:
S&P supported and bounced up from its important support at SP2,080 and 200 days moving average (200DMA) SP2,077 which is bullish because it means that buyers were attracted at those levels. NASDAQ COMPOSITE did almost the same and it is the strongest index between the three.
DJIA backdrop is the weakest but it bounced up with the other two. It is atop DJ17,400 old five months low that now acts as support. For DJIA is very important to close over DJ17,810.
DJIA is the only one which is running below 200DMA and 50DMA has crossed the 200DMA to the downside which should be bearish barring that DJIA is supported by S&P and NASDAQ COMPOSITE, they are over its 200DMA.
 The U.S. stock market behavior this year is toppish but still solid. S&P and NASDAQ COMPOSITE remian with neutral and bullish-leaning.
DJIA consolidation range is DJ17,050-18,351.

Please click over the chart to enlarge it.

Fundamentals:
Market was affected by Grexit, the fall of Shanghai Stock Exchange, Yuan devaluation, weaker Japanese economy, plunge of the oil and gold prices, neutral 2nd.earnings season of 2015, Brazil, all these in the last two months. With all these negative circumstances the stock market has supported in its consolidation range. I find this as positive.
August is not an easy month, senior traders are in holidays and market volume decreases during the summer doldrums.
We are going to face important economic news in the next two weeks and the market reaction is difficult to anticipate due the low volume.
Dear traders and investors, technical analysis still points to the upside and also fundamentals. I am still bullish but this time I am alert because the market direction can shift easily.

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

Well supported although China devalution

DJ Resistance:  18,351     All-time high
                           18,206     Breakout
                           18,104     2014 Peak
                           17,810     Last top and 200 days moving average
                           17,579

DJ Support:      17,400
                           17,279     Six months low
                           17,050     Very strong

Technical Analysis:
S&P and NASDAQ COMPOSITE supported over its 200 days moving averages. S&P has resisted the third attempt to breakdown the support at 200 days moving average, it shows its bullish bias barring a violation of this support. It means that buyers came in this important point. NASDAQ COMPOSITE still has its bullish bias and is the strongest index.
DJIA has tried to reverse from its six months low but it could not break DJ17,810 resistance. To recover a bullish bias DJIA has to stabilize over this level. DJIA is the weakest index and is doing lower highs with lower lows, which is negative.
We can conclude after technical analysis that the S&P with NASDAQ COMPOSITE remains resilient and they can bring support to the weak DJIA.

Please click over the charts to enlarge them.

Fundamentals:
Earnings season is almost gone and it didn't give us a summer rally. The stock market is going to move by the economic news and possibly by political during August with a low volume.
The long term bull market is toppish, watch the last seven months, but the upside bias is still in place.
August is the traders holidays time and it could be a boring month for the trading.
The market is evaluating how the China's currency devaluation is going to affect the activity, the Chinese Yuan has devalued 1.6 and 1.9%, Deutsche Bank is predicting the Yuan is overvalued by around 10%, so if the Yuan continues to weaken, the stock market should be affected. The rate increase should wait until the fourth quarter at least.
Dear traders and investors, it seems to me that we are going to navigate in the consolidation range during the next four weeks.This 2015 is very hard for the traders because it is toppish and stays into the range. My bias is still to the upside and don't forget that the long term bull market is still alive.

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

Technically still bullish, believe or not

DJ Resistance:  18,351     All-time high
                           18,206     Breakout
                           18,104     2014 Peak
                           17,810     Last top & 200 days moving average

  DJ Support:    17,400     Five months low
                           17,050     Very strong

Technical Analysis:
DJIA is the weakest index at the moment. It bounced up from its five months low DJ17,400 to the important resistance DJ 17,810 and 200 day moving average, same with 20 and 50 days moving averages, and it could not break up. Immediately DJIA retraced and today closed at DJ17,551. This movement shows weakness for DJIA but it remains in its consolidation range DJ17,050-18,351. If you watch the daily chart you will realize that in the last 3 months DJIA did lower highs which means red alert flags for DJIA in the short term. Also DJIA is toppish in the last 6 months. Is it bearish or we are next to face a bear market?
Conversely the S&P and NASDAQ COMPOSITE have a different backdrop, they supported over its 200 days moving averages, important support and guide which indicates long term trend. S&P is also toppish in the last 3 months and NASDAQ COMPOSITE did higher highs in the last 5 months.
What I read is that although the DJIA weakness the other 2 indexes maintain its bullish bias and barring they break down their supports, S&P2,080 and 2,070 200 days moving average. If they have enough steam to try the upper side, they will draw the DJIA.

Please click over the chart to enlarge it.

Fundamentals:
Apple and commodities are playing in the last ten sessions of the market, they reflect weakness. Apple has dropped 10% and has entered in a correction territory. Apple is 4% of S&P and 14% of NASDAQ COMPOSITE.
Growth in China and Shanghai Stock Exchange weigh into the market action. Greece is still in play.
Earnings season did not bring fuel for a summer rally. We have to pay attention to the economic news that are coming in the next fifteen days. This week the ADP employment on Wednesday, the unemployment rate and Non-farm payroll on Friday are going to rule the activity.
Dear traders and investors, the growth in China affects almost all the world, if they produce less they demand less, that affects the commodities prices, the commerce and so on. EU is still fighting with Greece but they are doing better, specially Spain, it is growing over 3% p.a. Brazil is in big troubles, Argentina and Venezuela are not left behind. Financial markets are ready to go into the Summer doldrums and are well supported. What I am trying to tell you is that those doldrums are welcome but we have to be alert because it would be easy a change in the market trend with the summer volume. Panic would be desastrous.

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