The Dow Jones Industrial Average initially rallied on Thursday but has given back gains.
That's not a huge surprise due to the fact that the 25,000 level is a large round psychologically significant figure and an area that of course would attract a lot of headlines.
The fact that we have turned around from here suggests that perhaps we are probably in a situation where we're just going to have to give back a little bit, especially considering that we have been too bullish for a while and we also have the non-farm payroll announcement coming out on Friday.
That obviously will have a major influence on risk appetite in the stock indices, and I think that remains the same type of volatility that we would expect. Ultimately if we do pull back from here, I think markets will look to the pullback as a potential buying opportunity. With this, I am looking for an opportunity to get long, but I also recognize that we had such an explosive on Wednesday that a little bit of hesitation and then a move to the upside probably helps.
Top Regulated Brokers
Non-Farm Payrolls and Critical Levels
Ultimately though, if we can break above the 50,000 level, then market participants will probably try to send the Dow Jones 30 to the 50,425 level again, an area that had been a swing high back in early February. Any pullback at this point in time I think offers a certain amount of value, but I think the 49,000 level is an area that we need to watch very closely because breaking down below there would be a massive breach of previous support.
I like this index; I just recognize that a lot of traders are probably a bit hesitant to get too aggressive ahead of the employment figures which obviously will cause chaos in the markets early on Friday.
Ready to trade our daily stock market analysis & predictions? Here are the best CFD brokers to choose from.