Dow Jones 30 Forecast Today - 29/01: Continues To See Buyers
(MENAFN- Daily Forex)
You can see that we initially pulled back a bit during the trading session here on Friday, but we continue to rally in the Dow Jones Industrial Average as we see a lot of money being pumped into the system. And of course, people are starting to bet on some type of recovery via central bank intervention. What I mean by this is that the federal Reserve comes in and liquefies the markets. Therefore, industry starts to pick up with all that cheap money and traders will continue to play the large industrials as a sign of recovery.
It's also worth noting that recently we had pulled bank a bit only to turn around and show signs of life at the 37,800 level. The 37,800 level previously had been a major area of resistance. So, the fact that we had a little bit of market memory in that area is not a huge surprise. I think at this point in time, it's likely that the Dow Jones industrial average will go looking towards the 40,000 level. Even if we were to break down below the 37,800 level, I think that there is a significant amount of support all the way down to the 37,000 level with the 50-day EMA rising towards that area as well.
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Federal Reserve
As long as traders believe that the Federal Reserve is coming to the rescue with loose monetary policy, it does make sense that stocks continue to climb. Remember, unlike the S&P 500 and the NASDAQ 100 , the Dow Jones 30 is a much more even keel look at the overall economy as it is only 30 stocks. Ultimately, I do think that this is a market that remains buy on the dip, but I think that is probably the same with just about any other stock index that I look at right now, especially American ones. However, the Dow Jones has just broken to fresh new highs, and therefore it makes a lot of sense that we would see some potential“FOMO trading.”
Every time this market pulls back, I am a buyer and I believe that the rest of the trading public feels the same way. I don't see this market changing attitude anytime soon, but it is a market that could end up being volatile, so prepare accordingly.
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