On the daily chart below, we can see that the Dow hasn’t done much since the end of last year. Recently, the price got even stuck in a tight range between the resistance at 34477 and the support at 33538.
The bias is turning more bearish as the hot economic data is making the market to rethink its expectations about earlier than expected pause in interest rates hikes and cuts by the end of this year. In fact, the market now sees a higher terminal rate with almost no cuts in 2023.
On the 4 hour chart below, we can see more closely the current rangebound price action with the support at 33538 holding pretty well. This is the worst environment for traders as one can be chopped out pretty easily on both sides. The best strategy would be to wait for a clear breakout on either side before taking any position.
In the 1 hour chart below, we can see that the price bounce from the support and the moving averages are now pointing north. This may be a signal that the price can move up again towards the resistance, but the recent catalysts are all bearish for the market. If one wants to “play the range” then buying at support and selling at resistance with defined risk is the only way to go for now.
