Dow Jones

Dow Jones Find Support on Previous Dynamic Resistance

Dow Jones keeps pushing higher no matter what happens with the U.S. economy, the virus, or U.S. politics. Now that almost a week has passed since the U.S. Capitol was stormed by protestants, the world is watching at the transfer of power that is supposed to take place one week from today.

Impeachment is on the table as well, so, until that point, the stock market may hover around the highs. The reluctance of the Dow index comes from what the Democrats promised – more stimulus in the first quarter of the year.

The vaccination campaign progresses with greater speed in the United States now. In fact, the United States is way ahead of Europe, which may offer yet another reason for stock market enthusiasts to bid for higher prices.

Today’s CPI data will show if the rising M2 money supply leads to outright inflation. If that is the case, the Dow will be the first one to react.

Dow Jones Technical Analysis

Needless to say, the chart below is bullish. As long as the Dow keeps forming a series of higher highs and higher lows, the bullish conditions remain in place. Hence, bulls may want to stay long with a stop at the previous higher low and target a new higher high.

On the other hand, bears may want to wait until Dow closes below the blue line, and ideally before it turns below the lower edge of the rising channel. Otherwise, the risk of shorting is too big as the bullish price action may continue further.

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Dow Jones Price Forecast

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