New All-time Highs

DJ Resistance:  18,373      All-time high
                           18,347.67 All-time closing
                           18,300      Light
                           18,171      April peak
                           18,104      2014 peak
                           18,016      Strong breakout
                           17,789      50 Days moving average
                           17,700
                           17,579      August inflection point
                           17,433      June low
                           17,325      May low 200 days moving average
                           17,125      Very strong
                           16,933.43 Strong September 2015 high
                           16,667      Inflection point
                           16,520
                           15,980      Strong
                           15,450      Strong
                           15,371.33 Very strong 2015 low

Technical Analysis:
DJIA and S&P have gotten new all-time levels and closings at the beginning of the third quarter, Wow!
This rally has the ground for a potential follow through, it has done the movement correctly accomplishing the rules of the technical analysis. We can comment that in the last years we have witnessed false breakout that means they did not follow through and then reversed.
Light supports will be the panning DJ18,000-18,012, this last is the 2015 closing high. Important supports are DJ18,171 (April peak) and DJ18,016. S&P supports are SP2,080 and 2,020.
Both the DJIA and S&P have absorbed the Brexit fall, DJ17,125, and bounced up eliminating resistance at DK18,016 and SP2,120. It took more than a year to break up the all-time highs to both indexes. And if you watch the chart you can realize that they have formed an interesting base to consider a solid follow through over the old all-time highs. I find that very bullish for both indexes and their backdrop remains bullish-leaning with positive perspective for the rally that we are witnessing now.

Pleasew click over the charts to enlarge them.

Fundamentals:
DJIA and S&P are in new highs and they could be higher. Firstable, the corporate earnings season is going to define the solidity of this upward move. Second, between investors there a lot of bears, investors and portfolio managers who are in cash because they did not expect this bounce up with new highs after Brexit. They think that they lost the beginning of the move and want to jump into the fortune wagon.
Dear traders and investors, we are going to face an intense market during this corporate earnings season. Markets wants higher levels and are thirsty of profits. They have waited more than a year for the new highs. Good earnings with growth are going to define this upward move before the summer doldrums. The next three weeks the market is going to be drive by emotions with rational earnings season besides the economic news, the last three important were positive as I indicated in the past blog.

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

DJ18,016 Mayor Resistance

DJ Resistance:  18,351      All-time high
                           18,206      Breakout
                           18,171      April peak
                           18,104      2014 peak
                           18,096      2016 peak
                           18,016      June peak

DJ Support:      17,780      50 Days moving average
                           17,579      August inflection point
                           17,433      May closing low
                           17,425      2015 Low
                           17,256      200 Days moving average
                           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:
Impressive the bounce up from DJ17,125 to DJ18,000 area. It did almost 900 points equivalent to 5.9% in four days. The index was stopped in a strong technical resistance zone approximately DJ18,016.
DJIA has supports at DJ17,780, and the strong one DJ17,579. For the S&P the supports are SP2,020 and 2,040.
The price action is very constructive to the upside especially the close over DJ17,579.
I expect a consolidation in this area waiting for the coming earnings season although the overbought momentum.
The selling volume at DJ18,000 and S&P below SP2,120 is to pay attention.
DJIA and S&P are bullish-leaning as they sleep over DJ17,579 and SP2,040.

Please click over the chart to enlarge it.

 Fundamentals:
ISM Manufacturing came last week better than expected at 53.2 driving the indexes to the mayor resistance opening the expectations to visit the all-time high, it was touched almost thirteen months ago. ISM Services is coming this Wednesday and unemployment rate with non-farm payroll of June this Friday. May added only 39,000 when expectations were 200,000. Those economic news and the earnings season would bring the opportunity to visit the all-time highs and to break up them. If the economic news are negative, the market would put a temporary ceiling in those resistances and it will trade in a range for a while.
Brexit brought uncertainty and it will affect the financial markets. There are a lot of question that look for answers. We can consider some almost sure facts like:
Low interest rates, U.S.A. will be the receptor of capital and money flows, European stocks would stay shaking, finally banks and financials may have harsh days in front of them due the low interest rates that makes not easy to them to win money. In addition the British pound continues falling.
Dear traders and investors, the Brexit bounce is giving some profit taking globally. That is normal and it reflects that investors are not sure about new highs. The economic data will clear all the bull and bear doubts.

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

Dead cat bounce?

DJ Resistance:  18,351      All-time high
                           18,206      Breakout
                           18,171      April peak
                           18,104      2014 peak
                           18,016      June peak
                           17,980      November 2015 peak
                           17,788      50 Days moving average
                           17,579      August 2015 inflection point
                           17,433      May closing low
                           17,425      2015 close

DJ Support:     17,249      200 Days moving average
                          17,125      Very strong and proved
                          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 lost about 900 points from June high and bounce up a bit more than 300 points. The index has formed a double top with the two intents on June to break DJ18,000, please watch the chart, the target of this formation is DJ16,850.
DJIA has perforated DJ17,579 and 17,242 (200 days moving average). Today's close was at DJ17,409 which is over DJ17,249 (Today's 200 days moving average), that is very important to strengthen the bulls. To overcome next resistance DJ17,425-17,433 is determinant to think about repairs, especially DJ17,579.
S&P did almost the same as DJIA and plunged from SP2,120 June high to  SP1,993 violating important support at SP2,040 now  clear resistance and 200 days moving average at 2,023.
June downdraft was very aggressive, broke down the lower triangle boundary (last week chart) and downward movement was explosive triggered by Brexit.
 The backdrop is bearish-leaning.

Please click over the chart to enlarge it.

Fundamentals:
Actually Brexit is awful for the European project, commercial markets, financial markets, etc. but it is not the end of the world. Right now there is a decisive fight between bears and bulls that is going to take some time particularly with the summer doldrums in the horizon. Bulls are winning at this moment.
What to do? There are two scenarios. One is that Brexit is between United Kingdom and Europe, and is one more add to increase the risk aversion which can affect the economic data and stock prices. Let's say that the possibility for a bear market has raised and bulls are losing the fight. The other one takes into account the same argument but considers that the impact in the U.S. economy is minimal then investors will disregard it easily with lower stock prices, better Earnings Yield and low interest rates. That means for a long term investor an opportunity to increase his portfolio because if the old bull market finishes and a bear market is imposed, in three or four years he will be back in the money.

Dear traders and investors, one of the two possibilities that I indicated above will be imposed as outcome. But how? It will be imposed by the majority of investors' decision not by which one is more rational or which one is the best. For the time being I would suggest a defensive attitude in the investments, I would prefer U.S. stocks.

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




                             

In the Range Bullish-Leaning

DJ Resistance:  18,351      All-time high
                           18,206      Breakout
                           18,171      April peak
                           18,104      2014 peak
                           18,016      June peak
                           17,980      November 2015 peak

DJ Support:      17,800      50 Days moving average
                           17,750      Light
                           17,579      August 2015 Inflection point
                           17,500      Last week low
                           17,332      May low
                           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:
June low created a good support and the indexes bounced up from there. What it is important to remark is that S&P and DJIA have bounced up and overcame the 50 days moving averages (SP2,080 and DJIA18,000) and now both of them became important supports. August breakdown DJ17,579 proved its validity with the bounce up.
DJ18,016, June peak, is the next important resistance besides the negative trend line that forms the upper side of the triangle, please watch the chart. Regularly in technical analysis, triangles explode when they break their resistance or support and we could get a strong movement.
S&P resistances are SP2,105 and 2,120.
The backdrop is still bullish-leaning and constructive to the upside.

Please click over the chart to enlarge it.

                         
Fundamentals:
Brexit is driven the markets because all eyes are on it. When the financial participants realized that a U.K. majority was for to stay in the European Union the markets bounced up from a steep fall, please watch Thursday of last week.
There are not important economic news this week, the only one is Brexit this June 23rd. And if the European Union (EU) stays unified as I expect, it is very possible to get a rally to the all-time highs DJ18,351 and SP 2,135 where the real battle is going to take place. I think to exceed those resistances, the investors should not have concerns about the economics. For that we have to wait until July first to digest ISM Manufacturing, next ISM Services and employment on July 8th, finally corporate earnings season on July.
Dear traders and investors, Brexit, Brexit and Brexit is in front of us and it is driven the markets. I would like to say to you which is the next market steep but it is impossible. All depend on Brexit in the very near term. And for new highs, the market needs more fuel that means no concerns about economics, better corporation growth and the change in the corporate earnings increasing them. The last five earnings season have contracted consecutively.

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

Markets stay in the range

DJ Resistance:  18,351      All-time high
                           18,206      Breakout
                           18,104      2014 peak
                           18,171      April peak
                           18,016      June peak
                           17,980      November 2015 peak
                           17,800

DJ Support:      17,664
                           17,579      August 2015 inflection point
                           17,425     2015 close
                           17,332      May low
                           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 could not progress to the all-time highs and retraced from resistance DJ18,810. Indexes stay in the range. S&P overcame April high but it was not the case for DJIA. For S&P de SP2,040 support is very important and it should work. For DJIA the support is DJ17,579. Below those levels we could see weakness in the indexes, next support DJ17,332 May low and the strong support for the DJIA would be DJ17,125.
Do not forget the 200 days moving average working this time as strong support for both indexes, DJ17,175.
Despite the retracement DJIA has a still a bullish bias and seems well supported.

Please click over the chart to enlarge it.

                      
 Fundamentals:
Brexit fears is ruling the market. Votes in favor the Brexit are increasing lately that explains why the 10 top European stock exchanges have lost about 400,000 billion in four days. The interest rates in Bund's are negative for the first time because investors sell stock and look for solid haven like Bund's. The sterling is losing value against the Dollar, Yen and Suisse Frank.
Soros and Icahn are negative about the market and are playing against it that explains also part of the weakness in the last days.
Investors that realize that the market is near to the tops immediately look around to see if all is o.k. but this time is easy to find potential problems such as the oil prices are below U.S. Dollar 50.- again, the slower worldwide growth, China concerns, manufacturing slump, the last two months weak U.S. employment reports and so on.
Retail sales report on Tuesday was strong enough to raise GDP Q2 estimation to +2.8% from +2%.
It is important the Federal funds announcement this Wednesday.

Dear traders and investors, there are not important economic news this week to move the markets. I think that we have to wait until July first week to see how the corporate earnings season will affect the market.

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

DJIA and S&P fight important resistances

DJ Resistance:  18,351      All-time high
                           18,206      Breakout
                           18,171      April 2016 high
                           18,104      2014 peak
                           17,980      November 2015 peak
                           17,934      May peak

DJ Support:      17,579      August 2015 inflection point
                           17,332      May low
                           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:
S&P2,117.5 is the next resistance, over it the way to the SP2,134 all-time high is open. DJIA next resistances are DJ17,934(May high) and 17,980 (November 2015 peak).
S&P and DJIA reached June high which is bullish. DJIA has rallied from the negative trend line support (watch purple line in the chart), technically this is bullish.
You can see in the chart the February to April rally with a limited April-May pullback supports a bullish bias. Pay attention to the positive trend line coming from 2015 low (red line in the chart).
S&P is stronger than DJIA backdrop.
Technical analysis shows a bullish-leaning path.

Please click over the chart to enlarge it.

Fundamentals:
Job report on Friday was disappointment the meager add jobs were 38,000. PMI Services dropped from 52.8 to 51.3 and ISM Services tumbled from 55.7 to 52.9. These and other non-positive economic news were received with happiness by the traders and investors because they expect the hike rates will be postponed. Small growth and weak jobs will put aside the risk of the FED rates increase. Investors prefer to be in stocks than in bonds or cash. That explains why the bulls have tried to overcome the resistances to fly to the all-time highs.
Dear traders and investors, technical analysis is showing bullish-leaning clearly. The rally from February is in place and the majority of the market participants are trying to push the market to the all-time peak. Bears could became bulls over SP2,100 and DJ18,000. But, personally, I prefer the fundamentals, the weak economic news could trigger a sell-off or an orderly sale. For me, economic growth is a concern, I have tried to explain in my last actualizations of the blog that, for the markets to visit the highs, it needs more fuel like growth and positive or better corporate earnings, the season would be in July. Do we have a summer rally?

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

DJIA still in the range, no breakout

DJ Resistance:  18,351      All-time high
                           18,206      Breakout
                           18,104      2014 peak
                           18,171
                           17,980      November 2015 peak
                           17,899.24 Tuesday peak

DJ Support:      17,724      Tuesday low
                           17,579      August 2015 inflection point
                           17,332      Strong
                           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 range-bound of DJIA and S&P is still in play. Next DJIA resistances are DJ17,899.24, DJ17,980 and supports at DJ17,724, 17,579,17,332 and 17,125.
The negative trend line (purple color) coming from DJ18,171 was touched this Tuesday and bounced up at DJ17,124. This is positive for the bull case. In addition the 50 days moving average supported DJIA at the same level (watch blue line). Technically the bounce up from May low supports the bullish-leaning.
Charts show DJIA and S&P well supported in a range with a bull trend but they are finding difficulties to break the rank. S&P range is SP2,000-2,100. Momentum is with the bulls, Tuesday trading was done with very high volume.

Please click over the charts to enlarge them.

Fundamentals:
The market is still in a range but this week we are going to get important economic news like Personal Income, Consumer Confidence, EMU manufacturing, ADP Employment, ISM Manufacturing, PMI Manufacturing, PMI Services, ISM Services, Global Composite PMI, Chain Store Sales, etc. Those could be the trigger for the breakout to the up or down side.
DJIA closed May with a gain of 0.1%, S&P did 1.5% over the month and NASDAQ COMPOSITE 3.6% gain over May.
Market is expecting the up move of the interest rates in June, the ten years bond is paying 1.82% p.a. coming from 1.87% p.a.
Real GDP for Q1 was revised from 0.5 to 0.8%, on a year to year basis that means 2% for the year.
Wages were accelerating during the past six quarters (NIPA) but corporate profits have declined on the wane for the last six quarters. Increases in wages undermine corporate profits because the consumption is solid in these moments.
Dear traders and investors, the market momentum and economics figures are with the bulls now. I think that growth in corporate earnings are the necessary fuel to continue with the old long term bullish market. For the moment pay attention to S&P2,100.

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