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Dow Jones Industrial Average Analysis (DJIA) » 1000 points to reach the highest level since August 2022

The Dow Jones Industrial Average ($30) shows the most strength in the stock market over the past month among the major US indices…

It’s been an absolutely crazy week for the markets, with the US CPI unexpectedly dropping 7.7% year on year, leading to the huge moves we’re seeing today. Following low inflation readings, traders are estimating an 80 percent chance of moving into a 50 basis point interest rate hike from the Federal Reserve and an interest rate hike in the lower terminal (below 5% yield). This dovish reversal had a huge impact on the markets: US Treasury yields plummeted (falling below 4% in 10 years to a one-month low), the US dollar collapsed across the board, and gold hit its highest level since August. and US indices rose sharply.

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This is the last move we want to note here: while the S&P 500 and the broader Nasdaq 100 continue to rise throughout the day, the robust Dow Jones Industrial Average ($30) is showing the most strength to date. major US indices. As shown in the chart below, the benchmark US index is poised to close at its highest level since late August and is facing little resistance until the May/August highs of around 34,000.

Source: TradingView, StoneX.

In the short term, a close near current levels would be bullish for a continuation towards the key 34,000 area as we move forward this month. Looking a little deeper, the DJIA is trading down less than 10% from the stock market highs set in early 2022. New Year, we are optimistic that the worst sales may be behind us.

From a technical standpoint, the daily EMA-50 and EMA-200 moving averages are rising, so as long as the index can hold near current levels, the long-term trend may soon reverse in favor of the dung bulls as we start looking to 2023.

Matt Weller, CFA, CMT, FOREX.com » Official site

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Disclaimer: The information and opinions contained in this report are for general information only and do not constitute an offer or solicitation to buy or sell any currency contracts or CFDs. Although the information contained herein has been obtained from sources believed to be reliable, the author does not warrant its accuracy or completeness and shall not be liable for any direct, indirect or consequential damages that may result from anyone relying on such information.

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