The Dow Jones Industrial Average lost ground this Monday on the back of a slowdown in the Chicago PMI and Pending Home Sales for November.
Pending Home Sales dropped by 1.1%, which was lower than the expectation of a 1.1% increase. After registering at 61.1 in the previous month, the Chicago PMI (Chicago business activity barometer) fell to 58.2, which was also lower than expected.
The data showed the impact of the lockdowns on manufacturing and the difficulty that Americans are facing in buying new homes after the US Congress failed to pass the stimulus package before the elections.
Data to watch for the week include Tuesday’s ISM Manufacturing PMI and Friday’s last NFP data for the year.
Technical Levels to Watch
Today’s 1.5% plunge on the Dow has put the lower boundary of the triangle at risk. If there is confirmation of the breakout, the expectation of a bullish conclusion to the triangle is tapered. This also brings new support targets at 29255 and 28661 into focus as new support targets.
On the flip side, a break above 30100 sends the Dow into new record territory. This move would depend on the lower boundary of the triangle staying intact and allowing bulls to use that as a springboard to break above the triangle’s upper limit. Possible extension targets from the price swing of 15 May to 3 September include 31079 and 32376.
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Dow Jones Daily Chart
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