The Dow Jones Industrial Average advanced slightly during its recent trading on intraday levels, to achieve gains for the second session in a row, by 0.11%. It gained about 37.63 points, to settle at the end of trading at the level of 33,241.57, after rising by 0.53% in last Friday’s trading.
Last week, the Dow rose nearly 1%, and in December so far the index has fallen by 4%, the largest monthly loss since September. The index is heading for its worst annual performance since 2008.
Investors took some optimism from the news that China will drop quarantine requirements for inbound travelers from January. Those travelers will still need to present a negative COVID test within 48 hours of travel, but will no longer need to isolate for five days. My routine at the hotel was followed by five days at home.
This is seen from the perspective that inflation will recede as China re-establishes its role as a supplier of low-cost commodities to the world and eases supply chain bottlenecks. However, the negative news is that as growth accelerates during the first quarter, the insatiable Chinese demand for raw materials and everything related to energy will drive up the prices of those commodities, sending the Federal Reserve and the European Central Bank into a panic.
Traders analyzed a range of economic data on Tuesday, including Retail Inventories which rose +0.1% in November to $738.7B, and Wholesale Inventories which came in at -1.0% (MoM).
In addition, trade in commodities contracted more than expected in November to -$83.53B compared to forecasts of -$97.0B.
The S&P Case-Shiller Home Price Index for October came in at 8.6% (YoY), above expectations of 8.2%.
Moreover, the Dallas Fed Manufacturing Survey for November came in at -18.8 vs. -19.4 previously.
Dow Jones Technical Analysis
Technically, the index received a positive boost in its previous trades, following its reliance on the support of its simple moving average for the previous 50-day period. This happened in conjunction with its re-testing of a bearish slope line that the index had breached earlier, as shown in the attached chart for a period (daily).
In addition to that, we notice the presence of positive signs on the relative strength indicators, after reaching oversold areas.
Therefore, our expectations indicate more rise for the index during its upcoming trading, as long as the 32,582.00 support remains intact, to target the important 34,281.36 resistance level.
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