Dow Jones Technical Analysis
The Nasdaq 100 initially rallied during the early hours on Wednesday, but we are waiting for a Federal Reserve meeting, which of course has a major implication on where we go next. All things being equal, the NASDAQ has started to recover, the S&P 500 has started to recover a little bit, and of course the Dow Jones 30 will follow right along. However, we are in the midst of earnings season also, and there is a bit of rotation into industrials, especially if the Fed sounds dovish, because that generally means big blue chip construction related stocks and manufacturing gets a bit of a boost.
That’s what we’ve seen recently. We had broken out of an ascending triangle. We came back to test the top of that triangle and then bounced again. This is a classic by the pullback after the breakout move. Ultimately, I do think that the Dow Jones 30 goes higher, though the next day or two could be rather noisy. 41,500 seems to be your ceiling above, so pay close attention to it as it also makes for a nice target. Underneath, we see a lot of support right around the 40,000 level, which, of course, is not only a large round psychologically significant figure, but it’s also the top of that triangle. In other words, I suspect it is the most important level on this chart, and I would expect a lot of orders to be focused on this level.
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