Will the Dow Jones Continue to Outperform? Dow Jones Futures (YM) have experienced a notable resurgence since the bottoming of 30-year bonds in late October, leading to lower yields. This rally in risk assets has propelled the Dow to trade at 52-week highs, overcoming the prevailing headwind of interest rates throughout much of the year.
Recent robust earnings from Salesforce positioned the Dow for outperformance in last week’s trade, as investors also shift focus from mega-cap tech stocks towards the Dow and the Russell 2000 as a "Catch Up" trade.
A significant boost to the Dow's relative outperformance occurred with the observed bottom in Chicago PMI numbers on November 30th, revealing manufacturing sector expansion well above consensus estimates (55.8 vs. 45.4 expected). This data has further bolstered confidence in the Dow Jones rally.
Major Headwinds for the Dow Jones:
However, the upcoming week poses challenges for risk assets, including Dow Jones futures, with various job-related data releases such as ADP Nonfarm, Avg Hourly Earnings, Unit Labor Costs, and the Unemployment rate. This data is expected to introduce volatility to the markets as bond traders recalibrate interest rate expectations for 2024.
Another significant headwind is the scheduled release of the Fed’s summary of Economic Projections on December 13th, including the infamous Dot Plot. The Dot Plot will outline the Fed’s interest rate expectations, potentially differing significantly from market expectations, which may create a volatile environment into the end of the year.
Support & Resistance:
Technically, the Dow has broken and closed above the old resistance of 35750-35880, which now serves as new support. To test all-time highs, a decisive break and close above 36305-36505 is awaited, signaling the Dow's sustained upward momentum amid shifting market dynamics.
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YM1! trade ideas
Long Ym Looking for slight pull back with price action that supports bullish narrative, around 34,900
then buying on bullish engulfing candles. Looking for Down close candles being rejected to form bullish engulfing. I'm not a genie or oracle so it's difficult to predict if it takes out the highest before moving lower or vise versa . This is the Third and Final leg up before I believe a corrective pullback will take place. This leg up should Break through some previous months highs to get into some buying liquidity for the move lower. Looking for 400 or so points up to get us close to the 35,400 or 35,500 area. If you find this helpful please like and share. If you disagree feel free to share your insights. Thank you for your time and for viewing my ideals.
DOW JONES Gameplan: Buy at D for final leg up to 38000 for crashI believe we are at the C portion and will not get fooled by this short term rally. I am expecting another leg down to D to close out the remainder of the year and the first quarter of next year. I believe D area just slightly under the rising weekly 200sma will be PRIME buying for the, in my opinion, the final leg up in this bear flag channel to either 37000 or 38000.
I will be anticipating a 36% sell off that is in line with the 1968 style sell off. Everything on this current chart is copying the 1962-1971 price action.
DOW JONES 1967 at the C portion of the ABCD
I still stand behind my prior post on the SP500. My only concern is I don't know the top, or the date. I only am estimating the general price action that is likely to happen. I am preparing for the inevitable crash that is coming in the next year, late late 2024 to early 2025.
Trade Reversals Successfully - Key Price Action to look forIn the video I talk through the two trades namely trading continuation with Trend and then trading Countertrend Reversals. Both have their own price action points but are very different.
I review a continuation trade and the setups I look for when trading from level to level...but the main focus on the video is trading Reversals which can be very rewarding but also very difficult.
I like to stick to a few key points when looking for reversals, and they are :-
- Trade off an extension into a key level
- Trade off a higher low (for buys) or lower high (for sells)
- M pattern for entry confirmation or a minor lower high
In the video I explain the reasoning and how risk is managed.
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Dow Jones Formed A Leading Diagonal?Dow Jones Industrial sector is the strongest this week and we can see sharp and impulsive intraday stabilization that can cause a bigger recovery in upcoming weeks, but ideally only within a higher degree A-B-C corrective rally in wave B after we spotted a larger leading diagonal from the highs into wave A. So, we will still have to be aware of another sell-off on stocks, but maybe later, at the end of 2023 or beginning of 2024.
Live Trades and Price Action setups explainedIn the video I review my trades on the DOW Jones Index for the session and talk through the setups, price action and reasoning for the trades. I also talk through the overall bias for the session and the missed opportunity from my sessions plan.
Feel free to join in our live trading room....link in the signature below.
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Example of Winning Price Action from a Live Trading SessionPrepping a market and having a defined directional bias coming into a trading session, is the key for a winning day.
In the video I talk through a Live Trading session we had with our group and the reasons why we were bias short.
I talk through the areas our traders hit sell entries and Where and Why I was happy to enter the market short once my ideal Price Action setup gave me all the confirmation that I needed.
** If you like the content then take a look at the profile to get more daily ideas and learning material **
** Comments and likes are greatly appreciated **