Yesterday, the Dow Jones extended the gains as the market continues to trade into the CPI release today probably expecting good inflation figures. This raises the risk of a bigger selloff in case the data surprises to the upside given that we should also see Treasury yields rising and the aggressive rate cuts expectations getting trimmed. At the same time, we will see the latest Jobless Claims figures and that will also be something to factor in as strong numbers might double down on a hot CPI report. The best-case scenario for the market is probably benign inflation data and not too weak Jobless Claims.
Dow Jones Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Dow Jones recently bounced on the red 21 moving average and it’s now about to make yet another all-time high. We might see the buyers increasing the bullish bets on the break of the high, although from a risk management perspective, the swing level around the 37060 level gives a much better risk to reward setup.
Dow Jones Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the trendline that’s been defining the uptrend since last November got breached recently. We can also notice that the price will likely diverge even more with the MACD with a new all-time high. This is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, we might get the full pullback into the 37060 level.
Dow Jones Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the current price action and the divergence with the MACD. We can also see that we have minor trendline defining the current uptrend, which is where the buyers will likely lean onto in case of minor pullbacks, while the sellers will want to see the price breaking lower to position for a drop into the 37060 level.
