AAPL(Apple): 4-1/2 year long-term trendline caps the 6-month rise; Clearing the 475 level decisively is key to further gains; Breaking below the 510 area weakens

Dow Jones Industrial Average (DJIA): Ongoing correction on the daily chart eyes 50 day MA or lower; Tested 14-year long-term trendline resistance before ranging

 

The daily chart: DJ just confirmed a lower high at 16058, triggering further weakness towards the 50 day moving average. Below there would open the 15445/15284 retracement levels ahead of the crucial 200 day ma.



The long-term perspective on the monthly chart:
DJ stalled at the November 16175 peak, right on the 14-year rising trendline resistance which connects the 2000 and 2008 peaks. This suggests consolidation may follow. The next key support is in 14551 area.

S&P 500 Index formed a 4-week double top; targeting 50 day moving average then key retracement level

SP formed a 4-week double top at 1813.6/1811.5 on the break below the 1777.2 support. Near term, the 50 day MA seems to be the next logical support/target. Below there is the double top equality target at 1744.0 and then the 50% retracement of the rise from the October low is at 1730.0.

S&P 500 Index forming potential bearish divergence as of 12/10/13 (Tuesday)

SP500 is forming potential bearish divergence as shown in the daily chart. A break below the 1779.09 swing low is needed to confirm it.

The 20-day MA at 1795.55 has been supporting the minor pullbacks since last November.

Therefore, the 1795/1779 support area is key.

While this support zone holds dips, there is scope for new highs.

If this area is broken to the downside, then the 50 day MA at 1756.48 is the next support. That is about a 3% pullback from the 1813.55 high.

Apple (AAPL) Could Be Capped under Long-term Rising Trendline Resistance near 550.00 on Monthly Chart; 5-month Rising Wedge Support at 500.00 Critical on Weekly/Daily Charts

30-year Bond Yields Stage Bullish Breakout, Extending Higher towards the Key 4.196/4.357 Zone

China Large-cap ETF (FXI) Stages a 2-month Bullish Flag Breakout on the Daily Chart; Weekly Chart could be forming an Inverse H&S Bottom

Underperforming Sectors include the Interest Rate Sensitive Sectors such as Real Estate (IYR), Materials (XLB), Home Builders (ITB), Gold Miners (GDX).

Any potential upside reversal above the down trendline would signal an end to the rising yields.

Leading Sectors: Consumer Discretionary (XLY) and Lately Industrials (XLI)

Japan ETF (EWJ) - Testing 6-month Bullish Pennant Resistance; Expecting Breakout towards 13.83 Next

Metlife (MET) Stages a 3-1/2 month Bullish Pennant Breakout; Fueling Gains towards 51.65 Next

US Dollar Index Consolidating near Flat 200-week MA while within a 7-year Triangle Range

28 years of Rising S&P 500 Equity Index v.s. Falling US Dollar Index

29 years of Rising S&P 500 Equity Index v.s. Falling US 10-year Treasury Yields

US 10-year Treasury Yields Remain Upwards Targeting 19-year Falling Channel Resistance at 3.352%

S&P 500 Reaching Record Highs near the 4-1/2 year Bull Channel Resistance; 20 day MA as Support

Lennar (LEN) weekly chart - forms bearish continuation triangle pattern, targeting 28/25 area

LEN corrected lower off the 44.40 peak (May 2013), retracing 38.2% of the 12.14/44.40 upswing. The subsequent 4-month long consolidation has been capped under the 37.87/37.84/37.79 lower ceiling. The recent downside break below the triangle support suggests completion of the bearish continuation pattern, triggering further weakness towards 28.00, 50% retracement, ahead of the 200 week MA at 25.15. Only an upside break through the 37.87 ceiling would negate and signal resumption of the broad uptrend towards 44.40.

American Eagle Outfitters (AEO) forms Head-&-Shoulders base, targeting 200 day MA at 17.90

AEO peaked at 22.97 in October 2012. Then the stock traced a year-long downtrend, reaching a new 52-week low at 13.14 in October 2013. As shown on the chart, it recovered off the low and formed a head-&-shoulders base on breaking through the 15.52/15.67 shoulder resistance line. While the 14.73 (20 day MA) area holds dips near term, the stock has the scope to challenge the 17.90 (200 day MA) area which is also near the 8-month falling trendline resistance. Stop should be placed beneath 14.73. A breakdown below 14.73 would signal topping and resume the broad weakness towards 13.14 for a retest.

Commodity Index (CCI) seems to be basing near the key 500 level; Current bounce targets 521.14

CCI found support at 503.24 (7 Aug low) ahead of the key support zone between 499.99 (28 Jun YTD low) and 502.28 (1 Jun 2012 low). This is also near the significant 50% retracement of the entire rise from 322.53 (Dec 2008 low) to 691.09 (Apr 2011 high). While the daily studies are improving, there is scope for further recovery towards the 521.14 lower ceiling (22 Jul high). Clearing the latter is needed to confirm a double bottom at 499.99/503.24 and trigger further gains towards the 200 day moving average currently at 544.71.

However, failure to hold the 499.99 key support would negate the upside and accelerate the 16-month downtrend from the April 2011 peak towards 477.39 (May 2010 low, shown on the monthly chart).

The latest price action in CCI has been encouraging. Bears tested the 2012 low at 502.28 (Jun 2012) near the key 50% retracement of the entire rise from 322.53 (Dec 2008 low) to 691.09 (Apr 2011 high) to stall at 499.99 (Jun 2013 low). The US Dollar has been sliding for the last five weeks, which could provide a catalyst for the commodities to stabilize here. We need to see bullish momentum on the daily chart to suggest basing.

Potential 3-1/2 week Expanding Triangle Top Forming; Targets 8-month Bull Channel Support near 15230

DJIA has been consolidating within a potential 3-1/2 week expanding triangle (a potential topping pattern) under the record high at 15658 (2 Aug). The bullish momentum seems to be waning as potential 3-month bearish divergence (from May 22 and Aug 2 highs) is forming. While the 15658/the rising trendline (from 18 Jul high/1/2 Aug highs) resistance zone caps further gains, a push below the key 15405 support (26 Jul low) would suggest completion of the expanding triangle topping pattern and trigger more downside towards 15230 (38.2% of 14551/15658 rise) which is also near 8-month bull channel support (from Nov 2012 low). Further weakness below the latter would expose the 5-month bull channel lower bounds (19 Mar/19 Apr/24 Jun lows) currently at 14615 for a retest.

However, if the 15405/15230 support zone holds, consolidation would continue. An upside break above 15658 would confirm a higher base and stage the potential upside target at 16250 which is near the converging point of the 53 month bull channel (from Mar 2009 low) and the aforementioned 8-month bull channel upper bounds. 

The long term uptrend remains intact while the 4.5-year bull channel support holds.

XLU (Utilities Select Sector SPDR) - 3-year bull trendline underpins further upside

XLU (38.65) broke above 38.45 (Jun 19 high) to confirm a base over 35.80 (Jun 21 low) near the 3-year bull trendline support (Aug 2011/Nov/Dec 2012 lows). While the gap low at 38.00 (Jul 10 high) and then the 200 day moving average currently at 37.25 support near-term dips, bulls are favored to extend the uptrend towards 39.45 (May 10 low). Further strength above there would open 40.54 (May 22 lower high) ahead of the YTD high at 41.44 (Apr 30).
However, falling below 37.25 would delay and expose the 36.51/35.80 key support zone (Jul 5/Jun 21 lows) for a retest.

Verizon (VZ) -- Potential 6-week range breakdown; Eyes 3-year bull trendline support area at 45-46

VZ ($50.24) has been consolidating under 51.69 (Jun 18 high) forming a triangle pattern. As both the RSI and Stochastics turned bearish, there is scope for the stock to test the 6-week bull trendline support currently at 50. A breakdown would confirm bear continuation and fuel further losses towards 48.81 (Jun 24 low). Below the latter would expose 47.77 (Jun 3 low). More weakness from there would open the key support cluster including 3-year bull trendline support (Aug 2011/April/2012/Jan 2013 lows) currently at 45.00, the 44.98/44.87/44.88 prior highs (Dec 2012/Jan/Feb 2013 highs) and the equality target (54.31/47.77 projected from 51.69) at 45.15.
However, an upside break above 51.69 would negate and confirm a higher low at 47.77, extending the broad uptrend towards 54.31 (Apr 30 YTD high) for a retest.

Commodities Index (CCI) foung support at 500 key level; Dollar Index (DXY) stalled at 3-year key resistance

S&P Index -- Long-term Uptrend Remains Intact; Short-term Targets 1536.0

US Dollar Index -- Consolidates within a 18-month Range; Targets Range Top at 81.50

US 30-year Treasury Bonds -- 22-month Top Confirmed; Targets 6-year Trendline Support

USDCAD - 5-week Bear Channel Points Lower

USDCAD was capped by a 17-month falling trendline (25 Nov 2011/4 Jun 2012/1 Mar highs). The subsequent descent has been following a 5-week bear channel (6/19 Mar highs and 15 Mar/2 Apr lows) to reach 1.0105 (4 Apr low) before consolidating. While the 1.0237 (5 Apr high) ceiling limits the bounce, scope remains for further weakness. A break below 1.0105 would signal bear continuation and open .9996 (14 Feb low) near the 200 day moving average currently at .9986. However, recycled strength above 1.0237 would delay and trigger further gains towards 1.0343 (1 Mar high) for a retest.

S&P Index – 3-week Range Breakout Posts New All-time Highs

S&P Index  broke out of a 3-week consolidation range to confirm a double bottom (at 1538.57/1539.50), extending the broad uptrend to post new all-time highs. Further strength opens the equality target at 1628.15 (1.000x 1573.66 from 1539.50), then Fibonacci projections at 1662.01 (1.382x) ahead of 1682.94 (1.618x). The 1573.66 (2 Apr range high)/1568.61 (10 Apr low) support zone should limit dips. Only sustained weakness below 1538.57/1539.50 would delay bulls and suggest topping for a move towards 1485.01 (26 Feb low).

DJIA (Dow Jones Industrial Average) – 3-month Bull Trendline Continues to Support

DJIA posted a new all-time high at 14684 (2 April) before consolidating. While the 3-month bull trendline (off 31 December 2012/25/26 February/5 April lows) support holds, scope remains for further strength targeting the Fibonacci projections at 14899 (1.500x 12035/13653 from 12472) ahead of 15090 (1.618x). A move below 14434 (5 April low) near the bull trendline would open the key 14382 support (19 March low). Only sustained weakness below the latter would delay bulls and expose 13784 (25/26 February low) where bull may reassert.

DJIA (Dow Jones Industrial Average) – 3-month Bull Trendline Continues to support

DJIA posted a new all-time high at 14684 (2 April) before consolidating. While the 3-month bull trendline (off 31 December 2012/25/26 February/5 April lows) support holds, scope remains for further strength targeting the Fibonacci projections at 14899 (1.500x 12035/13653 from 12472) ahead of 15090 (1.618x). A move below 14434 (5 April low) near the bull trendline would open the key 14382 support (19 March low). Only sustained weakness below the latter would delay bulls and expose 13784 (25/26 February low) where bull may reassert.

US 10-year Treasury Note Yields Broke Down from a 3-month Top, Pointing Lower

US 10-year T-note yields formed a 3-month top on breaking below bull trendline support (17/24 Jan/4 Mar lows). Deteriorating daily studies suggest more downside. The break below the 200 day MA support signals a deeper setback towards the key 1.564% (6 Dec 2012 low)/1.541% (4 Sep 2012 low) support zone. Further weakness below would there would expose the record low at 1.378% (25 Jul 2012) for a retest. It would take recycled strength back above the 200 day MA then 1.889% (1 Apr high) to stabilize for a move towards 1.976% (25 Mar high).

U.S. 30-year Treasury Bond Futures Staged 11-week Base Breakout

T-bond futures rallied through an 11-week base (24 Jan high/8 Mar low) to post new year-to-date highs. While the daily studies continue to strengthen, scope remains for further upside towards 148-25 (28 Dec 2012 high). A break above there would fuel further gains towards 149-29 (14 Dec 2012 high) ahead of the 152-21 key (16 Nov 2012 lower high). 146-01 (4 Apr low) should limit dips. Only sustained weakness below 144-00 (1 Apr low) would delay bulls and expose 142-00 (8 Mar low).

CCI Commodity Index - 4-month Falling Wedge Breakout Signals Basing