Yesterday, the Dow Jones finished the day positive despite some pressure for most of the day. There was no catalyst for the selling other than some general risk off sentiment due to impending Nvidia earnings. The company crushed expectations and the stock surged in after-hours trading. Although the stock is not part of the index, the general risk sentiment should improve and lead to some upside. Moreover, we got the FOMC Meeting Minutes yesterday but as it’s always the case, they were stale and didn’t contain anything that the market didn’t already know. Today we will see the latest US Jobless Claims figures and the US PMIs which will likely be big market movers.
Dow Jones Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Dow Jones bounced again on the red 21 moving average yesterday. The divergence with the MACD generally signals a weakening momentum which is often followed by pullbacks or reversals. In this case, the targets for the sellers should be the 37777 support and the 37066 swing low but they will need the price to break below the moving average to get things going. The buyers will need the price to break the all-time high to invalidate the bearish setup and position for new highs.
Dow Jones Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the market has been consolidating around the highs and that there’s not much else to glean from this chart given that we are right in the middle of the two key levels. So, we need to zoom in to see some more details.
Dow Jones Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we had a support zone around the 38500 level where we had also the confluence with the Fibonacci retracement levels and the daily red 21 moving average. This is where the buyers piled in with a defined risk below the zone to position for a break above the all-time high. The sellers, on the other hand, will likely step in again at the all-time high with a tight risk above it to target a drop into the 37777 support.