New high and fall back. Economics or Geopolitical?

DJ Resistance:   17,350.64  All-time record high
                            17,279,74  All-time closing high
                            17,152       Prior breakout point


DJ Support:       16,980
                            16,935      Strong
                            16,743      Very strong (May peak)
                            16,588      Strong (2013 peak)
                            16,355      Strong
                            16,015      Very strong

Technical Analysis:
DJIA and S&P have gotten a new historical high last week and they have pulled in. This reverse have worked the last three sessions.
DJIA should support between DJ16,980 to 16,935 and has the bullish consolidation range DJ16,935 - 17,152. For S&P the bullish range consolidation is SP1,971 - 2011. This time DJIA is stronger technically than S&P and NASDAQ Composite.
The market is consolidating, the medium term trend is to the upside. Stay firmly long over DJ16,935.

Please click over the chart to enlarge it.

Fundamentals:
The fundamental scenario is similar to the last fifteen days. Let's say the current U.S.A. economic data has being strong, European Union is still weak and signore Draghi is ready to stimulate the Economies and Monday's Chinese growth fears were overdone with the September China's manufacturing surprise improvement.
The geopolitical scenario is worst with the new military activity in the Middle East. The status among Ukraine, Russia, U.S.A., E.U. and NATO is lighter than fifteen days ago, of course, there is always the latent danger of the resumption of hostilities.
Dear traders and investors, I am still optimistic with the stock market because the trend is clear to me and I know that the worst month of the year about profitability is September, August is about trading due hollidays that reduce the volume. I think that the catalyzer that market needs is the September non-farm payroll and unemployment figures.
Good luck, viel Glueck, buona fortuna, buena suerte, bonne chance!

Ulises

Wednesday: market waits for FOMC

DJ Resistance:  17,167    All-time record high
                           17,138    All-time record closing high

DJ Support:      16,980    Strong (breakout)
                           16,935    Strong 50 days moving average
                           16,743    Very strong (May peak)
                           16,588    Strong (2013 peak)
                           16,355    Strong
                           16,015    Very strong

Technical Analysis:
DJIA is consolidating in its range DJ16,980 - 17,167. The temporary break down of the range support did a small index damage but the chart formation is still bullish and well supported by 50, 200 days moving average and the one year positive trend line support. That means that sellers were not attracted at DJ16,980. The picture is almost the same for the S&P which broke down support at SP1,990.
Right now DJIA is the leader of the three indexes and needs to get a new record high and close over.
Please click over the charts to enlarge them.

Fundamentals:
The U.S.A. economy is on the recovery path. Important economic news are coming but the most is about the FED because we don't know how the economy will react without the extra stimulus. Market stability is based on low interest rates and we don't know if the bond interest rate will climb. Personally, I expect the continuation of low interest rates until the end of the next year. That is my expectation but it is not for granted, we have to see how the market evolves. Said that, we have to watch the FED policy changes and how it will affect the bond interest rates and  consequently the stock market.
Dear traders and investors, this Wednesday ends September FOMC. All the market will focus on the statement at 2:00 o'clock. Possible, Mrs. Yellen will comment about the FED's exit plan. I am optimistic with the stock market because the unemployment is going better not at the level we need but has improved, the corporations are healthy and have cash, that means that interest rates can stay at the lowest levels. The comsumptions has to increase to support growth. Let's meet at 2:00 P.M.!

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

Ulises
                         

Reconfirmation of the breaks in August?

DJ Resistance:  17,161.55 All-time record high
                           17,138      All-time record closing high

DJ Support:      17,010     Light
                           16,980     Strong ( breakout)
                           16,743     Very Strong May peak
                           16,588     Strong 2013 peak
                           16,355     Strong
                           16,015     Very strong
Technical Analysis:
DJIA is fighting with its resistance at the all-time record high. This level is the battle field for bulls and bears. DJ is lagging S&P and NASDAQ Composite. Both of them need the DJIA to overcome its resistance to get green light for new record highs.  Other way DJIA could weigh the market to the down side and avoid this opportunity to trip in the new record territories. That is the reason I told you that the market needs in September to reconfirm the August break outs.
DJIA is still in the bullish range consolidation DJ16,980 (breakout watch daily chart) - 17,161.55 (all-time record high).
20, 50 and 200 days moving averages are pointing up and supports the blue-chip benchmark.
S&P bullish range consolidation over its breakout is SP1,990 - 2,011 (all-time record high).
Despite the supports testing, the market trend is to the upside.
Please click over the charts to enlarge them.

Fundamentals:
The U.S. economy is actually recovering, maybe markets need more speed. The problem in U.S.A. and E.U. is the unemployment, they need jobs with good quality. More jobs well paid will growth the consumption then the activity is going to increase, the corporations are going to be healthier and the government is going to cash more taxes.
We are facing important economic news, Last Friday non-farm payroll was disappointed but in general, news are positive for the economy. China sent a good one this week with its exports new record high.
In my opinion, rates are going to stay low for a year at least. The FED knows it, and they are not going to kill the recovery. In general terms the inflation is controlled. I am not supporting my fundamentals view because I think September has to confirm what we got in August to aspire the continuation of the bull market.
Dear traders and investors, my concerns is about the confirmation the August break outs to be sure that the bulls can fight in the market resistances attracting buyers in those levels.

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

Ulises

Bullish sentiment at the September beginning

DJ Resistance: 17,153.80   All-time record high
                           17,138       All-time record closing high
                           17,100

DJ Support:       17,020
                           16,980      Strong
                           16,743      Strong May peak
                           16,588      Strong 2013 peak
                           16,355      Strong
                           16,015      Very strong

Technical Analysis:
NASDAQ Composite is the leader now with S&P. They have breakout their resistances.  S&P got a new record high last week and the NASDAQ composite a new one in the last fourteen years. DJIA is lagging but fighting with its resistance.
The new consolidation bullish range is DJ16,980 - 17,153.80. And as it fights with resistance, the higher probabilities for the bulls. If DJ17,020 and DJ16,980 will support that would mean that those level do not attract sellers but buyers. The bull-bear battle would be on DJ17,153.80 for the DJIA. S&P and NASDAQ Composite have broken through that level equivalent.
September is beginning with a bull trend, it could be longer bull trend. As the market is overbought and August is a hard month, the market has to reconfirm during September the August breakout and bullish trend.
Plerase click over the charts to enlarge them.

Fundamentals:
The U.S. economy is in a recovery mood, economy news support that. For example two Tuesday's good news:  U.S. Manufacturing Index climbed to three year high in August and U.S. Construction Spending jumped 1.8% in July, both more than expected. The market expects low rates for at least in the next 10 months. Europe has recovery but very weak, it needs a lot more steam.
Geopolitical is unstable specially Ukraine with Russia behind. NATO is organizing its position, U.S.A. is the leader but we don't know exactly what are they going to do in front of Russia expansionist move. In the Middle East ISIS is a big problem, does U.S.A will go back to Iraq and this time to Syria?. Finally there is a cease-fire with an agreement between Palestine and Israel for the Gaza Strip, the bill is for U.S.A tax payers and Israel has substracted 400 hectares from Palestine as a compensation for the last complications.

Dear traders and investors, in my opinion we have to pay attention about the reconfirmation of the positive stock market move during August. That would be more important for the markets than the geopolitical situations. However geopolitical plays a lot on the financial markets, we should not neglect these factors.

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

Ulises

S&P touched 2,000 points

DJ Resistance:  17,153.80 All-time record high
                           17, 138      All-time record closing high

DJ Support:       17,070      Light (hourly)
                           16,980      Hourly
                           16,743      Strong May peak
                           16,588      Strong 2013 peak
                           16,355      Strong
                           16,015      Very strong

Technical Analysis:
The S&P has reversed its August first week down move with a rally to the SP2,005. What's more, this up move have formed a "Bullish V-Shaped Reversal" which is almost confirmed with the S&P closing at SP2,000. DJIA had done the same movement but it is still lagging, S&P is the leader. DJ "V-shaped rebound" from August first days is forming a possible "V-Shaped Reversal" but it is not yet confirmed. For that, DJIA needs to close several days over today's historical record high DJ17,153.80. What does it mean? DJIA could do 750 points in new record territory, the target should be DJ17,900 and for the S&P 60 more points at least.
200 days moving average and the one year positive trend line work as excellent supports for the DJ.
S&P and DJIA show its uptrend very clearly and the potential for an up move with nice rewards.
Please click over the chart to enlarge it.

Fundamentals:
Economy and corporations are doing well. U.S home prices increased 1% in June and U.S. Durable-goods orders jumped 26% in July on Boeing contracts. We are still getting some positive corporate earnings results. Recovery is on track.
August is not an easy month, watching the chart from 80 years ago until now, August is more positive than negative and better than other months. I would suggest to confirm this August rally in September or October because we could get easily a market reverse this month and due to volume is also faltering.
Dear traders and investors, at the beginning of 2014 I indicated that we were going to see S&P at 1,900 and very probably SP2,000. We have gotten both of them. I am surprised since I expected to be there in October or November as latest. That shows how hard is to work in the financial markets, economy is a social science not a mathematical. I am still with the bulls, I need to asses the stock market prices in September to clarify my mind.
Good luck, viel Glueck, buona fortuna, buena suerte, bonne chance!

Ulises

Geopolitical still in play but lighter

DJ Resistance:  17,151.57   All-time record high
                            17,130        All-time record closing high
                            16,970        Former breakout
                         
DJ Support:       16,856        50 days moving average
                            16,743        Strong May peak
                            16,588        Strong 2013 peak
                            16,355        Strong
                            16,015        Very strong

Technical Analysis:
The 200 days moving average supported very well last week and the market bounced up. This reconfirms the indicator's importance when it is trending. This support coincided with the year positive trend line, please watch the one year daily chart.
DJ has overcome its 50 days moving average on Tuesday which strengths its perspective to the upside. If the DJ penetrates DJ16,970 (former breakout) it could attempt its all-time record closing high.
The up movement of the S&P and the NASDAQ Composite's breakout doing 14 year high put the market in a bullish way, the DJ is lagging both indexes.
Please click over the chart to enlarge it.

Fundamentals:
DJ corrected about 3% before last bounce up.
The jobless claims increased to 311,000 last Thursday and Walmart announced lower earnings for the rest of the year.
Earnings season is almost gone but the earnings were enough strong to show health in the corporations environment. The 66% of the corporations in the S&P have announced better earnings than analyst's expectation. That shows an evident growth. Corporation's sales are in a good shape because they are higher 4% than a year ago and that explains that the earnings come from them and not from saving costs.
Interest rates are low and there are not inflation's expectations for the short term. For the long term there is not a clear picture after the FED is going to stop buying bonds.
Earnings, low interest and the controlled inflation are fueling the stock prices. I expect an interest rates movement after the FED stops bond buying. That doesn't mean that interest rates are going to increase immediately because wages are not increasing.
Dear traders and investors, we know that American corporations are healthy and are plenty of cash. In the other hand the investors are expecting an increase in the interest rates. We have to watch the interest rates behavior after the FED finishes the bond buying. I am still bullish.

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

Ulises

Geopolitical

DJ Resistance:   17,151.57 All-time record high
                   17,130   All-time closing high
                   16,877
                   16,743   Strong May peak
                   16,588   Strong last year peak

DJ Support:         16,362       200 Days moving average

                             16,333.78   Last week low

                             16,015        Very strong

Technical Analysis:

Last week the 200 days moving averages supported de Dow Jones Index Averages at about DJ16,340 please watch the Daily Chart. Technically this is good for the Dow Jones because this indicator is respected by the market. The problem as I see is that the DJIA is still below DJ16,588 (last year peak). It has to overcome at least DJ16,588 resistance to look for stabilization. It is better to overcome DJ16,743 (May peak).

We have to pay attention to the volume. It decreased in the last two sessions.

The market shifted trend in the short term with the breakdown in the July last days but the trend is still up in the long term (watch the one year daily chart).

I expect to clear you with this panoramic vue. August is not an easy month to navigate and it is very probably that we are going to get hectic movements in the next four weeks due the low volume. It is not necesary deeper technical analysis.

Please click over the chart to enlarge it.

Fundamentals:

Geopolitical is heavy and press the market. The market is expecting important July economic news this and next week.

Investors are worried about inflation. The ten years bond is paying 2.42% p.a. which means that market is not expecting a rates hike by the Federal Reserve otherway it would be over 3% and maybe 5%. These low rates are excellent for the stock market and we could think about an uptrend of the stock market for the rest of the year.

Investors fears a correction due the last five years bull market. I agree with them in some moment we are going to see sells in the market. But for that we need to realise an increase in the ten year bond rate approaching to its rate average over 5% p.a.

Dear traders and investors, market fears a correction that would be very positive for the stock market. At this moment the facts are more for the upside although the short term trend but we are in the "Summer Doldrums" and we have to be alert to deal with any kind of movement.

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

Ulises