The Dow Jones relentless rally is continuing ahead of the first-quarter earnings season. The DJIA is trading at $33,445, which is a few points below its all-time high. This rally is also being supported by the fear and greed index, which has risen to the greed zone of 63.
What happened: The Dow Jones index has rallied by more than 11% this year, helped by the large government stimulus package and the relatively low interest rates. The index has also rallied because of the upcoming $2.3 trillion infrastructure package that will benefit many Dow constituents like Caterpillar and Microsoft.
The top-performing Dow Jones this year are Walgreens, Intel, Caterpillar, Goldman Sachs, and Chevron. On the other hand, the only companies in the red are Apple, Merck, Nike, Walmart, and Coca-Cola.
The Dow Jones is also rising after Joe Biden signaled that he will consider changing his tax proposals. To fund the major infrastructure package, he wants to hike taxes to most companies, especially the biggest ones.
Meanwhile, the fear and greed index has been rising, which is a positive sign for the Dow and other indices. It simply means that investors are willing to take risks. The red signs will emerge when the index reaches the extreme greed zone of more than 80.
Fear and greed index
Dow Jones technical forecast
There is nothing much to talk about the Dow Jones. The index has been moving in an upward trend in the past few months. This rally is being supported by the moving averages and the rising red trendline. It is also slightly below the important resistance level at $34,000. Therefore, in my view, it is just a matter of time before the index rises to a record high of $34,000. This is just 1.7% above the current level.