Dow Jones Technical Analysis: Index Gathering Positive Strength
Mary Daley of the Federal Reserve Bank of San Francisco said on Monday that financial markets are behaving as if interest rates are much higher than they actually are.
- The Dow Jones Industrial Average declined during its recent trading at the intraday levels, to record slight losses in its last session.
- It went down by -0.13%, losing the index about -45.41 points, to settle at the end of trading at the level of 33,700.29.
- This happened after rising during last Friday’s trading by a rate of 0.59%.
Atlanta Fed President Rafael Bostic’s comments helped buoy stocks a bit. He said over the weekend that he favors slowing the pace of interest rate increases and sees the possibility of a rate hike, or final interest rate, near 5% for this cycle. Mary Daley of the Federal Reserve Bank of San Francisco said on Monday that financial markets are behaving as if interest rates are much higher than they actually are.
These comments come at the start of a week marked by weak and short economic data drivers as the US celebrates Thanksgiving on Thursday. On Friday the annual festive shopping season will start in earnest, so trading is likely to be very thin and we could find some volatility.
The main event that investors are waiting for this week will be the release of minutes from the Federal Reserve’s latest interest rate meeting, scheduled for release on Wednesday.
Meanwhile, one of the two largest US rail unions has rejected a labor agreement brokered by the White House, raising the spectrum of a possible strike by early December, one that could lead to more supply chain problems that will continue to drive inflation levels.
Dow Jones Technical Analysis
Technically, the index is affected by its earlier breach of a bearish corrective slope in the short term. This is shown in the attached chart for a (daily) period, supported by its continuous trading above its simple moving average for the previous 50 days.
Therefore, our expectations suggest that the index will rise again in its upcoming trading, as long as the 32,504.00 support level remains intact, to target the pivotal and nearby 34,281.30 resistance level in preparation for attacking it.
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