Dow Jones Average Trades Lower On US-China Trade Skepticism

The Dow Jones Industrial Average has opened lower on the day, as markets start to get wary of continued hype about the Phase 1 deal between the US and China. Even today’s positive comments by US President Donald Trump on the matter did not lift the mood of the markets, which only made a transient move up before sellers took over the market.

Ever since the possible signing of a Phase 1 US-China trade deal was announced weeks ago, not much progress has been made on that front. Rather, several roadblocks have continued to emerge:

  • ambivalent comments by the US President
  • the issue of rollback of tariffs and to what extent such rollbacks would be done
  • the recent anti-government protests in Hong Kong and the “Hong Kong bill” which recently passed by the US Congress

It looks like the US market traders are tired of all the talk and simply want the deal signed. Traders are talking profit and the Dow is trading at 27,828.6.

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Technical Outlook: Dow Jones Industrial Average

The weekly chart shows that the current retreat is a pullback from the upper border of the rising wedge pattern. Near-term, price action remains contained within the symmetrical triangle.

If price breaks below the triangle, we would expect a push to the downside which targets 27,772 (November 15 intraday low) and possibly 27, 671.52 (S1 support level).

On the flip side, a break to the upside takes price above the triangle, targeting 27, 961.47 (R2 pivot). This move would be supported by a decisive close above today’s R1 pivot (27,868), which has so far held its own as an intraday resistance level.More content