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The S&P 500 is completed five winning months in a row and has the positive performance for the month so far, while on a weekly basis is in the process to complete the fourth consecutive positive session. The major pull of the S&P the last three months is the health care stock components that added more than 7.0% to their values. All the three most popular U.S. indices had positive performance the two prior months with strong gains in July (S&P 500 rose 1.93%, Nasdaq climbed 3.38% and Dow Jones added 2.54% to its value) and marginal positive performance in August (S&P 500 picked up just 0.05%, Nasdaq increased 1.27% and Dow Jones ended the month 0.26% higher).

They are currently recording the third positive month in a row favorited from the less than expected damage Hurricane Irma left behind and the hints of U.S. President Donald Trump to reduce the corporate taxes. Fed policy meeting is scheduled for next week and Fed Chair Janet Yellen comments on the economy will impact the market, especially If she states something out of the expectations. Even though the market participants expect another rate hike from Fed in this year, this is not awaited for next week’s policy meeting, September 20th. In addition, some investors believed that Fed may consider cutting rates in order to help the economy recover after the hurricanes’ damages, which are expected to be obvious in the figures of the third quarter. 

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Dow Jones Industrial Average – Technical Outlook
The Dow Jones Industrial Average index traded higher over the previous days maintaining its gains. The index is trading in a tight range between 21610.00 – 21178.50 during the last month. However, on a medium-term basis, the price is developing within an ascending trend line since November 2016, adding more than 15% to its performance.

Technically, the Dow Jones jumped above the 50-day SMA and if the price surges above the upper boundary will hit a new high. Unfortunately, trading ranges are very difficult to trade profitably, so we are suggesting to wait until the price breaks the consolidation area. The RSI indicator is moving in the bullish territory near the 70 level, whilst the MACD oscillator surpassed the trigger line and is strengthening its momentum.

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S&P 500 – Technical Outlook
The S&P 500 index posted a fresh all-time high at 2497.18 on Tuesday and soared more than 3% following the bounce off the ascending trend line, which coincides with the 2415.00. Currently, the index is establishing within an upward tendency since December 2016 and is losing some of its gains. The most probable scenario is a further bullish movement, creating a new high. On the other side, the price may post a downward correction until the 50-day SMA, near 2464.00 before continues rising.

In contrast with the Dow Jones Industrial Average, the technical indicators of S&P 500 seem to be confused. The RSI indicator is falling in the positive territory, while the MACD oscillator is moving higher above its trigger and zero lines indicating for more gains on price.  

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U.S. and North Korea's tensions shook the world’s stock market. The two powerful countries are exchanging verbal threats as Pyongyang threatened to strike Guam, a U.S. territory, and U.S. President Donald Trump warned that further threatening words and actions “will be met with fire and fury like the world has never seen”.

The escalated geopolitical uncertainty led the investors to turn to safe-haven assets as Gold, Japanese yen, Swiss franc and government bonds. The stock-indices around the world are experiencing strong sell-off while gold added more than 1.80% to its value the last three days, and silver climbed 5.0% so far, in the week starting on August 7th. Tokyo’s Nikkei 225 Cash index is falling for the fourth day in a row, more than 2% down from the 20,081.00 opening on Monday, August 7th.

The political turmoil is not expected to disappear in a single day. We would expect further losses in the indices in the next days but we hope tensions will calm down. As shown in the table below, the U.S. index S&P 500 has not suffered heavy losses yet but an extension of its downside movement in today's Asian session is very likely.

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Nikkei225 – Technical Outlook
The Japan Nikkei225 index is developing lower over the last two months as it plunged more than 1.5% since July. The price exited from the sideways channel with upper boundary the 20185 resistance level and lower boundary the 19845 support barrier. In June, the index posted a new two-year high at 20322, however, it failed to keep rising and is now recording the third bearish day in a row. On a short-term basis, the price is developing beneath the 50 and 100 SMAs, signalling for further fall. The next level to have in mind is the 19550 handle, which is slightly above the 200-day SMA.

Furthermore, if the price slips below the latter level, it will open the door for the 19270 obstacle. The technical indicators are endorsing the bearish scenario. The MACD oscillator is dropping with a steady move and recently plunged below the trigger line. The RSI indicator is pointing down and is trading near the 30 level.JAPANCashDaily100817

S&P500 – Technical Outlook
 On a long-term basis, the S&P500 index has been developing in an uptrend for more than nine months, climbing 18% and recording an all-time high at the 2490 resistance level. Over the last three weeks, the price is trading sideways within an area with lower boundary the 2460 support barrier and upper boundary the 2490 resistance level. Our expectation is a further decline move until the ascending trend line near the 2451 level, which coincides with the 50-day SMA. However, a rebound on the latter level is possible for a bullish movement.

Technically, on the daily chart, the indicators seem to have a negative tendency. The Relative Strength Index (RSI) is moving near its mid-level and is pointing down, whilst the MACD oscillator is falling. Additionally, the stochastic oscillator is moving lower, towards the oversold zone.US500CashDaily100817

DAX30 – Technical Outlook
The German DAX30 index dropped aggressively during the previous two months, following the aggressive pullback from the 12953 high, almost 7%. The index began a downward correction of the ascending tendency, which was holding since November of 2016. Moreover, the price is creating the fourth consecutive red day and slipped beneath the 200-day SMA.

From a technical point of view, on the daily chart, the index has been developing below the bearish crossover within the 50 and 100 SMAs. In addition, the MACD oscillator is holding in the negative area and is currently starting to strengthen its momentum, whilst the RSI indicator is sloping to the downside. Our prediction is a hit of the next support barrier at 11935. The stochastic oscillator is moving lower and is approaching the 20 level.DE30CashDaily100817

The U.S. indices didn’t reveal any surprises during the past month. They kept their rising momentum and recorded fresh all-time highs, after a small slowdown in May. Dow Jones industrial average index rose 1.62% the previous month while S&P added 0.48% to its value. Both indicators locked their third winning month in a row and the seventh in the last eight months. The exception was the high-tech index, the Nasdaq Composite, which recorded losses of 0.94% in June and snapped a seven-month rising streak.  The Fed interest rate hike on June 14th left the stocks indifferent as it had been digested by the market earlier.

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The biggest single-day losses of the three most-known indices in June took place on June 29th, following strong sell-offs in technological stocks. Shares of Facebook, Amazon, Netflix, Apple and Google-parent Alphabet all dropped more than 1%. Chip stocks also fell, with Nvidia and Advanced Micro Devices closing at 3.3% and 4.8% lower, respectively. On that day, the blue-chip index closed at 168 points down, with Apple, Boeing, and 3M contributing most to the losses, while during the trading session it briefly fell more than 250 points. The S&P 500 dropped 0.9% while the Nasdaq Composite index fell 1.4%.

The driver of the S&P500 last month was the financial sector, which added total gains of 6.7% at its stocks, followed by health care with a 2.5% increase. On the other hand, technology stocks and utilities declined almost 5.0% each, followed by consumer staples stocks which fell more than 4.0%.

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Looking at the longer term, the three U.S. indices ended the first half of the year with strong gains and with no signals for a trend reversal. S&P 500 ran 8.2% in the first six months of 2017, its best half-year since 2013. Dow Jones gained 8.0% for the same period while the tech-heavy index Nasdaq Composite books gains of 14.1%.

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Dow Jones Industrial Average Posted Three Bullish Months in a Row
The Dow Jones Industrial Average has been trading in an ascending move since November 2016 and added at its value more than 18% since then. In June, the U.S. index recorded a fresh all-time high at 21,562 following the aggressive run that started after the strong rebound on the 17,480 support barrier. Going to the short-term timeframe, the blue-chip stock index recorded three winning monthly sessions in a row and is moving towards the aforementioned all-time high. If the price surpasses the 21,562 resistance, it will open the way for a further bullish movement with new highs. An alternative scenario is a slip below the rising trend line until the 21,065 support handle.

Looking on the same chart, the technical indicators are biased slightly higher. The Relative Strength Index (RSI) is rising after the pullback on the 50 level and is approaching the overbought area. Furthermore, the MACD oscillator is moving in the positive territory beneath the trigger line.

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S&P 500 Kept Neutral Momentum the Last Five Weeks
On a long-term basis, the S&P 500 index has been developing in an uptrend for more than seven months, climbing 10% and recording an all-time high at the 2454 resistance level. Over the last five weeks, the price is trading in a consolidation area with lower boundary the 2402 support barrier and upper boundary the 2454 resistance level. The pullback on the trend line helped the price to jump slightly higher.

Technically, on the daily chart, the indicators seem to be weak. The Relative Strength Index (RSI) is moving near its mid-level whilst the MACD oscillator is falling near the zero line. Additionally, the stochastic oscillator is moving within the 20 and 80 levels and created a bullish crossover within its moving averages with 50-day SMA moving slightly below the price. Our expectation is a hit of the previous all-time high.

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Nasdaq Created a Sharp Sell-Off Since June
The Nasdaq Composite index, following the bounce off the all-time high at 5897, started a sharp sell-off, indicating a pause for further upside movement. The price plunged more than 1.4% since June and is developing towards the 5546 support barrier. Also, the index slipped beneath the 50-day SMA and is trading near the 100-day SMA. The initial target to have in mind is the 50-day SMA, 5729 resistance level to the upside, if the price starts an upward movement. On the other hand, if the index slips below 5546, it will challenge 5482.

On the daily chart, the technical indicators are confirming the recent bearish attitude. The RSI indicator plunged below the 50 level whilst the MACD oscillator is strengthening in the negative territory sharp below the mid-level.

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U.S. Indices are rising again after the slowdown which came from the uncertainty of Trump’s administration. After almost a month of sideways movement, the U.S. indices seem to gain again momentum for creating new highs. Federal Open Market Committee repeated that an interest rate hike is coming soon and the majority of the market participants expects the Federal Reserve to raise rates in June with a chance of more than 80% as per CME FedWatch Tool. FOMC minutes from the policy meeting that took place on May 2-3, released yesterday. The committee left funds target rate unchanged at 0.75% to 1% and hinted that a rate hike is still on the table, bolstering the U.S. stocks. However, they put as a condition the next economic data that would be released to be in line with their expectations and they mentioned that “it would be prudent” to wait for evidence that a recent slowdown in economic activity had been transitory.

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During the last month, technology had been the most gainful sector among S&P 500 components, adding more than 4%, while the second in row sector added less than half of these gains. On the other hand, the weaker sector was energy which lost 0.67% during the last month. Though OPEC’s move to extend output cuts by nine months will reverse these losses soon.

Dow Jones Will Extend its Gains Soon
The Dow Jones Industrial Average is developing in an ascending move since November of 2016 and added at its value more than 11% since then. In March the U.S. index recorded a fresh all-time high at 21,171.40 following the aggressive run that started after the strong rebound on the 17,470 support barrier. Going to the short-term timeframe, the blue-chip stock index recorded six winning daily sessions in a row and is moving towards the aforementioned all-time high. If the price surpasses the 21,171.40 resistance, it will open the way for a further bullish movement with new highs. An alternative scenario is a slip below the rising trend line until the 20,140 support handle.

Looking on the same chart, the technical indicators are biased sharply higher. The Relative Strength Index (RSI) is rising with strong momentum and is approaching the overbought area. Furthermore, the MACD oscillator climbed above its trigger line while it is following a positive path.

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S&P 500 Recorded a Fresh All-Time High
The S&P 500 index posted a new all-time high at 2413,48 today and surged almost 3% over the last six trading sessions. Moreover, it is in progress to record the seventh consecutive positive day and we are waiting for further upside movement while is also ready to create the second green month in a row. The price is developing well above the three simple moving averages (50, 100 and 200) on the daily chart indicating a continuation of the recent tendency. The sharp uptrend started since November of 2016 and we have no signals for a big retracement. The technical indicators are also confirming the bullish move. The RSI indicator is moving towards the 70 level and is strengthening while the MACD oscillator is moving above both, its trigger and zero lines.

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The three most popular U.S. indices got over the period that were recording continuously all-time record highs and entered a retracement phase. Dow Jones Industrial average is down more than 1.20% to 20,372.00 so far, in April, while it slipped 0.72% in March after its top at 21,171.40. S&P 500 sank over 1% to 2325.62 in April, coming from marginal losses the previous month. The two indices have a similar performance which accelerated to the downside in the current period of earnings releases.

Dow Jones Industrial Average – Technical Outlook
The Dow Jones Industrial Average started a retracement after the bounce off the fresh all-time high at 21171.40 which recorded early in the previous month. Since March the index plummeted almost 800 points and posted a two-month low at 20,372.00 which overlaps with the 100-daily SMA. Currently, the price is approaching the 23.6% Fibonacci retracement level with low at 17,060.00 and high at 21,171.00, near 20,203.00.

However, if the price rebounds on the aforementioned SMA, we would expect a run towards the 20,890.00 resistance barrier. The technical indicators seem to be in contrast. The Relative Strength Index (RSI) is holding in the negative territory and is sloping to the upside whilst the MACD oscillator plunged below its trigger line with strong momentum.
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Worst-Performing Blue Chip Stocks of the Month
The biggest pull to the downside of the Dow Jones Industrial Average was Goldman Sachs (NYSE: GS; $214.07) which dropped more than 8% in a month. The earnings report of the company for the first quarter of 2017, released on April 18th, revealed that EPS were $5.15, below estimations of $5.27 plunging the share price.
The second worst performing stock is not far away. International Business Machines (NYSE: IBM; $161.65), the fifth-most influential company in Dow Jones, dropped 7% the last month, and had a big impact on the index’s performance. The American multinational technology company reported net income of $1.75 billion, or $1.85 a share in the first quarter of the year, compared with $2 billion, or $2.09 a share, in the year-earlier period. Even though the company reported earnings of $2.38 a share versus $2.35 expected, it was not enough to support the stock price. Following the report, IBM stock had the biggest one-day drop since June leading the price at its weakest level since December.

IBM (NYSE: IBM) – Technical Outlook
The IMB stock opened with a gap to the downside over yesterday’s trading session and managed to challenge the short-term ascending trend line. Additionally, it should be noted that the short-term rising trend line, which dates back in June of 2016, continues to provide a significant support to the price action. The price after the sell-off hit the 50.0% Fibonacci retracement level with low at $145.45 and high at $182.75 and if the price surpasses the $162.60 resistance level, it will open the door for $165.00 which overlaps with the 200-daily SMA. On the other hand, a continuation of the free fall will expose the stock price towards 61.8% fibo level at $158.00. The technical indicators are confirming our second thought as both are holding in oversold areas. The MACD oscillator declined below its trigger line while the RSI indicator lies below the 30 level.

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Best-Performing Blue Chip Stocks of the Month
On the other hand, the best performed stock of the blue-chip index, the last month, was the Wal-Mart Stores (NYSE: WMT; $74.07) which is an American multinational retailing corporation that operates as a chain of hypermarkets, discount department stores, and grocery stores. The stock surged almost 6% in this period, while the second in order best performed stock was McDonald’s Corporation (NYSE: MCD; $132.62) which soared slightly more than 3%.
Both stocks gained its upward strength from its strong earnings report for Q1. The Wal-Mart Stores announced quarterly earnings of $1.3 a share versus $0.97 a share expected whilst the McDonald’s earnings per share beat also the predictions and rose at $1.43 against $1.33 expected.

Best and Worst Performing Stocks of S&P 500 & Nasdaq Composite
The S&P 500 index plunged more than 1% so far this month following the rebound on the all-time high at 2401.28. The index started a retracement to the downside in April and one of the companies that influenced negatively the index is IBM and Goldman Sachs mentioned above.
The Nasdaq Composite Index is not performing like the other two popular U.S. indices, Dow Jones and S&P 500. The high-index exposed sharply higher in the previous five months and added at its value almost 13% while in the current month the price recorded a fresh all-time high at 5480. In the current month, the stock is slipped 0.43% so far. The stock with the highest positive performance included among the stock components was HTG Molecular Diagnostics (NASDAQ: HTGM; $5.51) which jumped more than 186%.

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The U.S. stocks suffered its biggest one-day fall since U.S. elections in November, on Tuesday, as market participants worry whether President Donald Trump will manage to get the votes needed from the congress to apply the infrastructure and tax reforms promised in order to bring fiscal boost. On Tuesday, Trump attempted to pass a health care bill (repeal Obamacare) through congress and revealed that it will take more time that estimated and policymakers may not even vote for it, which bring into question whether he has the ability to pass other reforms scheduled in his agenda. These key reforms were the reason behind Trump’s rally in the stock markets and prospects that may delay or never happen was a strong punch.

The blue-chip index, Dow Jones industrial average dropped 1.14%, 237.85 points down ending the daily session at 20,668.00 while Nasdaq Composite plunged 1.83%, 107.70 points lower at 5,793.83. The S&P 500 also experience severe losses of 1.14% or 29.45 points ending Tuesday’s trading session at 2,344.02. All of the three indices ended last year with gains above solid gains above 10% and continued to rise apace the first two months recording gains over 5% each. However, March seems to be a weak month for the U.S. indices. A number of below forecasts earnings report from various firms and the last concerns for U.S. administration turned the monthly performance of the three most popular indices negative.

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Federal Reserves’ decision to raise fund rates by 25 basis points to 1.0% in the last policy meeting in March failed to have a big immediate impact on the stocks as we believe that the market had already digested this rate hike. Market participants were rather focused to gauge the number of rate hikes will happen until the end of the year and when. On Thursday, Fed Chair Janet Yellen’s speech will attract important attention from traders. Next week, on Thursday, March 30, U.S. GDP will be in focus. Apart from the two mentioned scheduled events and the political developments regarding Trump’s reforms approval, there are no other market driver forces planned yet for March.

Dow Jones Industrial Average – Technical Outlook
The Dow Jones Industrial Average fell sharply since Tuesday’s period and plunged around 390 points. The index during the previous session was trading sideways recently after the aggressive run to the upside following the strong rebound on the 17,470.00 support level. Currently, the price is trading below the 20,780.00 barrier and is slightly above the 50-daily SMA.

The initial target to the downside is the 20,140.00 critical level which overlaps with the 200-daily SMA and with the 23.6% Fibonacci retracement level of the last big upward move with low on June 26th of 2016 at 17,070.00 and high on March 1st of 2017 at 21,171.00 the all-time high. An alternative scenario is a jump above the 20,780.00 resistance handle which it will open the door for a retest of the latter level.

Technical indicators on the medium-term timeframe seem to be in agreement with the negative thought. The RSI indicator is falling after the bounce off the overbought area and is approaching the positive territory. The MACD oscillator is still moving on a bullish path, however, is in progress to create a bearish crossover with its trigger line. On the short-term chart, both MACD and RSI are falling with strong momentum.

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S&P 500 – Technical Outlook
The S&P 500 index it is on track to snap a four-month winning streak with a near 0.85% losses so far this month. The index is moving sharply higher after the pullback from the 2,401.28 resistance level and probably is ready to create a correction to the downside. On Tuesday, the price printed a violent sell-off and plunged below the 2,350.00 barrier and the lower band of the Bollinger band indicating further declining.

From the technical point of view, on the daily chart, the price hit the 50-SMA and seems that it found an obstacle before it continues its downward movement. The RSI indicator fell below the 50 level, however, now, is pointing upwards. The MACD oscillator is dropping and is approaching the zero line. The next level to watch is the 2,300.00 strong psychological level which is slightly above the 100-SMA. If the price surpasses 2,350.00 then, it will challenge the aforementioned high.

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The three most popular U.S indices are on new all-time record highs again! U.S. President Trump promised to deliver soon a phenomenal tax plan and in combination with his pre-election promises for tax cuts, the perspective of the plan culminated the U.S. stock market.

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Since November, when the United States elected Donald Trump as the new President, S&P 500 picked up 9.2%, Dow Jones rose 12.0% and Nasdaq Composite added 10.7%. Trump has as priority to improve country’s infrastructure and help the economy create more jobs. On Monday, February 13th, the total value of the shares in S&P 500 topped $20 trillion for the first time ever. The earning reports of the major companies are keep coming out better than expected, pushing further the stocks. In the new year, all of the S&P 500 sectors advanced, with only exception the energy sector which hit from oil production cuts.

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Currently, we all expect Fed Chair Janet Yellen semi-annual testimony on the economy amid the prospect of a major tax plan announcement from Trump in the coming days. Yellen will testify on the economy and the monetary policy before the Senate and House committees in Washington DC today at 15:00 GMT, while tomorrow, she will testify before the Senate Banking Committee at the same time. There are no big changes in the economy since December, however, given that the most popular U.S. indices are recording fresh all-time highs and the treasury yields picked up, we would expect Yellen to be generally optimistic. The economy speeded its pace of expansion for the second consecutive quarter in Q4, at 1.9% annually, while inflation finally reached the strongly eyed 2% Fed’s target and edged higher to 2.1% year-over-year for the month of December. The jobless rate remains at very low levels, below 5%, while the economy still adds a significant number of jobs monthly despite the minimal but positive wage growth. In addition, the manufacturing and industrial sectors continue to expand on a steady pace in the last quarter of the year.

Dow Jones Industrial Average – Technical Outlook
The Dow Jones Industrial Average traded sharply higher since November, adding more than 12% at its value. Currently, it is recording the fourth bullish month in a row and during the Monday's trading session, February 13th, the index printed a fresh all-time high at 20,440.80 price level.

On a long-term basis, the price is moving upwards aggressively after the bounce off the 17,470 strong support barrier and we expect further rise for a new high. The technical structure still suggests an incline move as the moving averages, on all timeframes, are pointing to the upside. On the daily timeframe, the RSI indicator is following an overbought path, however, over the last few sessions is flattening. The MACD oscillator is moving higher above the trigger and zero lines with strong momentum. 

An alternative scenario is the beginning of a downward correction. If the price starts a retracement and slips below the 50-daily SMA which is near the 20,000 strong psychological level, it would open the door for the 19,720 barrier.

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S&P 500 – Technical Outlook
The S&P 500 index surged more than 9% since last November and is recording, for several days, new all-time highs. In the previous trading period, it printed another new high at 2331 and created the fifth green consecutive day. Moreover, currently, the price is trying to create the fourth positive month in a row after it met the 2031 support level.  

On a short-term basis, the index is developing in an ascending move and the next level to watch is a fresh all-time high. On the other hand, if the price drops below the rising trend line, it would open the way for a decline until the 2266 support handle which overlaps with the 23.6% Fibonacci retracement level of the big upward move from the low on November 9th, 2016 until the high on February 12th, 2017. Technical indicators are still moving into positive territory. The RSI indicator approached the 70 level and surpassed it while the MACD oscillator rose above its trigger line and is strengthening.

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NASDAQ – Technical Outlook
The high-tech index is currently printing the fourth green month in a row and is creating a fresh all-time high near the 5262 price level. The index started the aggressive upward movement following the rebound on the 4850 support barrier and rose more than 10% since last November. Our expectation is a further upside potential move above the previous all-time high. A new high is very likely in the near future, as well as, in the other indices.

Technically, the moving averages are moving higher, approaching the current market price. Technical indicators are endorsing the recent upward momentum as both are holding in a positive area. The RSI indicator lies in the overbought area and is still rising while MACD jumped above its trigger line and confirms the bullish price action.

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Ahead of earnings season, Dow Jones is finding strong resistance on the 20,000 level while Nasdaq and S&P500 are posting all-time record highs. Last year the biggest boost on the U.S. indices came from the energy sector which added more than 34% followed by financial sector with gains slight lower than 30%. It’s remarkable that all the sectors managed to end the year with positive performance, showing that it was a really good year for the stocks despite the bad beginning. Last January, traders were talking about a possible crisis as all the three most popular U.S. indices plunged. The S&P500 has fallen 5.07%, Dow Jones 5.50% and Nasdaq by most 7.86%. However, they didn’t only cover their losses but achieved to close with gains over 10% each. As you can see below, S&P500 advanced by 11.01%, Dow Jones 14.15% while Nasdaq rose 10.47%.

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The Dow Jones Industrial Average rose 14.15% in 2016 and stacked below 20,000 missing the momentum to rise further. Many traders have already their long positions and as no one is entering the market now, the index cannot find the push it needs to surpass the strong psychological level of 20,000. The earnings season ahead and the changes will take place over the Donald Trump’s presidency, may stimulate the index further. On the shorter term, the Trump’s first press conference later in the afternoon today could create volatility. The U.S. President-elect is expected to give clues if he will deliver his promises for cutting taxes and raising spending.

During the last month, Apple (NASDAQ: AAPL) was the biggest drag of the blue chip index, adding more than 5.00% at its value, followed by American Express (NYSE: AXP) which rose 4.17%. In contrast, Exxon Mobil (NYSE: XOM) was the biggest pull of the index to the downside with losses around 5.60%, and second in line the Wal-Mart Stores (NYSE: WMT) which fall 4.80%.

Nasdaq Composite Index added 10.47% in 2016 but the remarkable thing of the tech-heavy index is the creation of its longest streak of all-time record closes since 1999 in a series of six consecutive daily candles. Meanwhile, the S&P500 is experiencing a flat period the last few days, as it closes around 2,280 without significant moves.

Dow Jones Industrial Average – Technical Outlook
After the aggressive rally that created early in the previous month on DJIA, now we can see a brief period of consolidation before the continuation of the upward movement. Over the last four weeks, the index has established and traded within a sideways channel with lower boundary the 19,720 support level and upper boundary the 20,000 strong psychological level. A break in either direction will expose the price to challenge new highs, or otherwise to start a retracement until the Fibonacci retracement level 23.6% (low of June 2016 with high January 2017) which is near the 19,300 support barrier. Also, if there is a downward move, the price needs to go through the 50-daily SMA which acts as a significant support handle.

From a technical point of view, the technical indicators are confirming the bearish scenario as both are moving slightly lower. The Relative Strength Index (RSI) plunged below the 70 level and is pointing downwards approaching the 50 level. The MACD oscillator is falling as it is holding below its trigger line, however, it still lies above the zero line. 

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S&P 500 – Technical Outlook
The S&P 500 index edged sharply higher since last November and was recording for several days new all-time highs. The price surged more than 6% over the last three months, however, a small retracement to the downside is possible. The index hit the 2181 price level and rebounded on it while the price is moving lower from its fresh high.

The next level to watch would be the 2232 support barrier which overlaps with the 50-daily SMA or moreover the 2213 obstacle which coincides with the Fibonacci retracement level 23.6% (low June 2016 with high January 2017). Despite that, the three SMAs (50, 100 and 200 SMAs) are sloping upwards, the technical indicators are moving lower. The RSI indicator is moving towards the 50 level while the MACD oscillator fell below the trigger line and is weakening the last couple of days.

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Nasdaq Composite Index – Technical Outlook
The high-tech index is currently printing the third green month in a row as it is created a fresh all-time high at 5050.48 during yesterday’s session. The index started the aggressive rally following the strong rebound from the 4850 support barrier which coincides with the 50 and 100 SMAs on the daily chart. Also, the price rose more than 3.8% over the last three months while the next initial target would be a new high if there is a break above the 5050.48. Otherwise, a failed attempt will move the price to move south or sideways.

Technical indicators are endorsing the recent upward momentum except for stochastic oscillator which created a bearish crossover with its moving averages. RSI indicator is following a positive path while MACD lies above both, its trigger and zero lines. 

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Below you can find the most important earnings releases in January:

2017 01 10 16 26 04 Stock100117 Excel

The U.S. indices are continuously creating new highs while they are trading around three shafts:

  1. Donald’ Trumps Election

  2. Oil Production Cut

  3. Prospect Fed will Raise Rates

 

It’s remarkable, that the week just past was the best week for the U.S. indices since U.S. elections, and the one it starts today promises to keep volatility high. Dow Jones recorded its fifth straight winning week while it added 3.31% so far this month, following solid gains of 5.41% in November. The S&P500 is also up for the month by 2.76% after 3.42% gains the previous month, on the back of a strong pull from the financial and energy sectors. Fewer gains but not negligible posted by Nasdaq, which climbed 2.27% in the first ten trading days of December, and 2.59% the month before.

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All the three indices are about to end the year with strong increases, mainly dragged up by energy sector while the health sector has been the weakest in 2016. The blue-chip index is up 13.38%, slightly below 20,000 while the S&P500 enjoys gains of 10.55% for the year, being around 2,260. Last but not least, the high-tech index Nasdaq rose 8.72% for 2016, until now.

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Firstly, Donald Trump’s election as the next U.S. president was a benefit for the three most popular U.S. indices, as Trump plans include power up of the inside U.S. economy and in turn boost of the U.S. stock market. Moreover, the agreement for oil output cut had a similar vigorous impact as Trump’s win.

Oil jumped to the highest level since July 2015 at the week’s opening as non-OPEC countries joined the deal for oil production cut and Saudi Arabia signaled deeper cuts! At the last OPEC meeting on November 30th, the countries reached a deal to cut oil production for the first time in eight years, sending the stocks to new record high levels. S&P500 and Dow Jones favored once again by non-OPEC and Saudi Arabia willingness to make further cuts in oil output.

The two-day FOMC meeting starts tomorrow and may add pressure to the stocks. If Federal Reserve finally put the raise button, for an increase of 25bp at its 0.25%-0.50% funds rate range, and signal more rates hikes to come, traders may turn bearish. This meeting will be the catalyst for the tone of the markets for the next months. It’s noteworthy, that according to the FedWatch Tool of CME Group, there is a probability of 97.2% Fed to increase borrowing rates.

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Dow Jones Industrial Average (DJIA) – Technical Outlook
The Dow Jones Industrial Average has an aggressive roller coaster run since last month, after the announcement of Trump’s winning in the U.S. Presidential elections. The index surged more than 9% since November and recorded an all-time fresh high at 19,873.50 following the strong rebound on the 17,470 support barrier. Currently, the blue-chip index is developing near its high at 19,790.00. The Fed interest rate decision on Wednesday is likely to have a direct effect on the index. If the price penetrates the all-time high at 19,873.50, then the index will print a new one. Otherwise, a correction to the downside is possible until the 19,177.00 support barrier.

From a technical point of view, the blue chip index continues trading above its moving averages while the 50-SMA had a bullish crossover with the 100-SMA, on the daily chart, in the previous days. The RSI indicator is moving in an overbought area, however, is pointing downwards. The MACD oscillator is rising and is still holding in a positive territory above its trigger line.

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S&P 500 – Technical Outlook
The S&P 500 index climbed to an all-time high in December and challenged the 2,270.60 price level. Since last month, the index surged more than 6% following the significant bounce off the 2,030.00 support level. The index is developing in an ascending move over the last five years and the technical structure remains bullish in a long-term timeframe. 

From a technical point of view, on the daily chart, the price is trading near the previous all-time high and if there is a penetration of the latter level, will expose the index to a fresh high. Otherwise, if the price failed to surpass the aforementioned obstacles, it will slip near the 2,113.80. Technical indicators seem to be in agreement with the bullish attitude as both are moving within a positive path. However, the Relative Strength Index (RSI) is pointing downwards near the 70 level whilst the MACD oscillator is moving above its trigger and zero lines.

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NASDAQ – Technical Outlook
Over the last three months, the Nasdaq Composite index is moving in an uptrend move within a rising sloping channel and currently the price is developing near the 4,877.00 price level. Over the last six days, the index jumped more than 3.4% and is approaching the previous all-time high at 4,923.90. Additionally, a break above the latter level will open the way for a new high. On the other hand, the price may plunge below the 4,800.00 barrier which overlaps with the 50 and 100 SMAs, on the daily chart, and will meet the uptrend line near the 4,700.00 obstacle. The RSI indicator is following a bullish area while it is falling and the MACD oscillator is rising above its zero and trigger lines.

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Wednesday, 19.10.2016, 07:44

U.S. Indices Report: October

Written by
Published in Stock Markets Insight

U.S. indices have been consolidating around their all-time highs over the last couple of months as investors look at several factors which could give a trend direction in the coming months. This includes the last two Federal Reserve (Fed) policy meetings for this year, the strong dollar, the third quarter earnings, the U.S. indices that are set to deliver the third consecutive month of decline and of course the U.S. presidential elections on November 08.

The Fed keeps its main interest rate unchanged at 0.5% since last December when interest rates were raised for the first time in more than a decade. The next policy meeting is on November 2nd, a week before the U.S. presidential elections, and will not be accompanied by a press conference. Thus, we wouldn’t expect the Fed to make any changes in the monetary policy then; in contrast, all investors will turn their attention to the elections result.

The limelight for the Fed rates is on December 14th. Many market participants believe that the U.S. central bank is likely to lift rates then, if the data coming out for the economy keeps its strength, as Fed members had signalled. However, Fed Chair Yellen and Vice Chair Fischer at their last press conferences changed their tone and tried to convince the market that raising rates is not that simple. Raising rates based on employment and inflation may be premature given the state of the global economy. Moreover, low rates help the U.S. economy to gather some steam to pick up its recovery pace, improve labor market participation and business investment.

Strong Dollar Hurts U.S. Economy
The U.S. dollar has been moving north over the last three years, climbing to 31-year highs against the sterling while it maintained its gains against the euro and yen. While the strong dollar is a positive for Americans who travel overseas, it is bad for multinational American companies who are dealing with international business, as it makes U.S. exports and products more expensive to foreign buyers and reduces the conversion of foreign profits from foreign currencies into dollars. Over the last few years, many developed countries, such as the Eurozone, U.K. China and Japan, have devaluated their currencies making their exports more attractive to foreign buyers. Therefore, a stronger currency hurts company earnings and if corporations haven't hedged overseas profits, this translates into fewer dollars which could have a strong effect on the next few quarters’ revenues.   

Important Earnings to Watch until next Fed meeting:
Oct 20 – Microsoft | Verizon
Oct 21 – McDonald's | General Elec
Oct 25 – Apple | Alibaba
Oct 27 – Alphabet (Google) | Amazon
Oct 28 – Exxon Mobil
Nov 02 – Facebook

Dow Jones Record is Threaten to Be Broken
The Dow Jones Industrial Average is trading down -1.20% so far this month and is on the verge of tallying three consecutive months of declines. If the Dow Jones closes red in October it would be the first time since September 2011 when the blue-chip index fell for five months in a row. During the May - September 2011 period, the index recorded losses of more than 15%.  On Thursday 13th, the index hit a low below the key support level of 18000, which includes the 200-day SMA before bouncing back.

A similar story for the S&P 500 index which is also trading down -1.93% so far this month with October shaping up to be the ugliest monthly fall since January; the month after the Federal Reserve raised rates for the first time in a decade. If the index finishes negative in October, it would be the first time since February when the index fell 7% within a three-month period. 

It should be noted that both of the indices, the Dow and S&P 500, kept their year-to-date gains, 3.85% and 4.05%, respectively.

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U.S. Presidential Elections Will Not Affect the Stock Market
The election is making a lot of investors anxious and as we get closer to the U.S. Presidential elections we could see some bigger swings in the U.S. stock market. In our point of view, it really doesn’t matter who fills in the blank – whether it’s Trump or Clinton - as we don’t believe that whoever wins the White House will make any long-term difference to the U.S. stock market. There is no past evidence to suggest otherwise and, on top of that, there are a bunch of other factors (not wholly connected to the President’s tenure) that influences what happens to the stock market.   

However, let’s have a look at the average returns of Down Jones under the last three American Presidents, including Ronald Reagan. While U.S. President Bill Clinton holds the baton, George W. Bush saw a negative market returns during his tenure. Moreover, during President Obama’s tenure the stock market experienced strong gains, similar with President Reagan’s tenure. 

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Dow Jones and S&P 500 Technical Outlook
The Dow Jones Industrial Average has been establishing an ascending move since January 2016, however, from June the price is moving in a trading range, divided into two phases. The index challenged the all-time high at 18664 and now is trading near the 18185 price level slightly below the 100-SMA on the 4-hour chart.

The first consolidation area started from July and broke to the downside the strong support zone 18252 – 18337 in September. The second phase started after the aggressive sell-off during the penetration of the previous range. Currently, the price is developing between the 17950 support barrier and the 18405 resistance obstacle. A break above the latter level will open the door for a retest of the 18405 region and the previous all-time high at 18664. On the other side, if the price lips below the lower band of the second phase of the trading range will then challenge the next support level at 17705.

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The S&P500 is trading in an uptrend since January 2016 and gained more than 4% following the rebound on the 1807 support level. During August, the price challenged the all-time high at 2193 and currently is trading in a sideways channel after the pullback from the fresh high.

Technically, the price is establishing below the short-term falling trend line which seems to be a strong resistance for the bulls and is slightly above the 50 and 100 daily SMAs. The next level to watch out for is the 2180 resistance barrier which is our first target in the short-term. Beyond that level, we have set the 2193 obstacle as our second target. Moreover, a penetration of the latter level will expose the price to record new highs. The RSI oscillator is endorsing the bullish thought as it is sloping upwards, near the 50 level. 

On the other hand, the strong support zone at 2106 – 2113 which coincides with the 200-daily SMA and the 23.6% Fibonacci level is a significant area for the bears. A break below the aforementioned obstacle will open the way for the 1952 support level which is near with the 61.8% Fibonacci level.

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