- The Dow Jones 30 has rallied early during the trading session on Monday, as we continue to see a lot of noisy behavior, in what looks to be a massive consolidation area.
- Underneath, the 38,500 level is an area that I pay close attention to, due to the fact that it is an area of massive support previously.
- Furthermore, we also have the 50-Day EMA approaching that level as a massive support level, and therefore technical traders will be paying close attention.
All things being equal, this is a market that I think will continue to be very noisy and somewhat sideways, but eventually we will go looking to the highs again. The 39,300 level is an area that previously has formed a little bit of a short-term double top, but the uptrend is very much ensconced in this market. Furthermore, keep in mind that most traders will be paying close attention to the Federal Reserve later this week, as we are going to see an interest rate decision come and go. It’s not only the Federal Reserve, but its most major central banks around the world also have something to say this week.
The strategy going forward
Short-term dips will continue to be buying opportunities from everything that I can see, as the market has been so bullish for so long. I think ultimately you have to look at this through the prism of a market that is doing everything he can to continue the uptrend, and of course it’s worth noting that the Dow Jones 30 is a little bit different than other indices due to the fact that it is equal weighted. In other words, it’s not the same type of nonsense that you will see in the S&P 500 or the NASDAQ. All 30 stocks need to perform and to push this market higher, and that’s sometimes why this market does tend to lack some of the others. It doesn’t have the “magnificent 7” to push or pull it in one direction or the other. That being said, it is still a very positive market and I will continue to look at it as a “buy on the dips” opportunity.
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