Last Friday, the Dow Jones rallied into a new all-time high following a surprisingly strong NFP report. The headline number was much higher than even the most optimistic estimates with the unemployment rate ticking lower. There were also some bad things though like the plunge in Average Weekly Hours which contributed to push higher Average Hourly Earnings and the Household survey showing job losses for the second consecutive month.
In fact, even Fed’s Goolsbee mentioned this detail saying that “despite the brisk hiring numbers, weakness in overall hours worked suggests that this wasn’t as strong as that headline number suggested. There are big seasonal adjustments in January and the data might have been distorted a bit which makes trusting this report a little harder.
Dow Jones Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Dow Jones continues to print all-time highs as the buyers pile in at every pullback. We can see that we have a trendline that will now define the uptrend. In case we get a pullback, we can expect the buyers to lean on the trendline to position for new highs. The sellers, on the other hand, will want to see the price breaking lower to position for a bigger correction into the 37777 level first and upon a further break lower the 37066 level.
Dow Jones Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more clearly how the price keeps on breaking the resistances, retesting them and then continuing higher into new all-time highs. We can also notice that in case we get another pullback, the buyers will also have the red 21 moving average around the trendline for confluence.
Dow Jones Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the recent price action and we can notice that we have another resistance turned support around the 38550 level where the buyers should lean onto to position for another rally. The sellers, on the other hand, will want to see the price breaking lower to position for a drop into the trendline and upon a further break lower target the 37777 level.
Upcoming Events
This week is basically empty on the data front with just a couple of key economic releases. Today we have the US ISM Services PMI where the market will likely focus on the employment index given the big drop last month. On Thursday, we will see the latest US Jobless Claims figures where the market will want to see if the resilience in the labour market remains intact.
