Yesterday, the Dow Jones finished the day positive as the lack of bearish catalysts continues to support the market. In fact, the path of least resistance remains to the upside as growth and employment stay resilient, and the Fed continues to signal three rate cuts this year even if inflation reaccelerates a bit.
Dow Jones Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Dow Jones is trading inside a rising channel and continues to diverge with the MACD, which is generally a sign of weakening momentum often followed by pullbacks or reversals. From a risk management perspective, the buyers will have a much better risk to reward setup around the lower bound of the channel where they will also find the red 21 moving average for confluence. The sellers, on the other hand, will want to see the price breaking lower to position for a drop into new lows with the base of the channel at 37128 being the ultimate target.
Dow Jones Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price recently bounced on the previous resistance turned support where we had also the confluence with the red 21 moving average. The buyers stepped in to position for a rally into the upper bound of the channel. The sellers, on the other hand, will want to see the price breaking below the lower bound of the channel before even considering going short in this market.
Dow Jones Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the recent price action with bounce on the support and the strong rally afterwards. There’s not much else to glean from this chart as there is no good entry point anymore. If the price were to pull back again though, the buyers will likely pile in around the lower bound of the channel, where they will have a much better risk to reward setup.
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Today we get the latest US Jobless Claims figures, while tomorrow we conclude with the US PCE report and Fed Chair Powell.
