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MENAFN- Daily Forex)
In my daily analysis of the Dow Jones 30, it's obvious that the market is in an uptrend, but the trading session on Thursday has been quite brutal. I think part of this might be due to the fact that traders are starting to ask questions about a potential interest rate cut and wide that might mean about the US economy. Nonetheless, I think there are plenty of areas underneath that could offer support, so I think if you are patient enough, you should have a nice buying opportunity.
The importance of the 40,000 level
The importance of the 40,000 level cannot be overstated, mainly due to the fact that it is the top of the previous ascending triangle, where the 50-Day EMA also resides. With this being the case, the market is likely to continue to see a lot of interest in that area, and if we do drop to that area, I think a lot of people will be looking to pick up the market, assuming that we even get down to that area. Quite frankly, this remains a“buy on the dips market”, as we have seen so much bullish pressure over the recent several months, and of course have not hit the“measured move” from the ascending triangle that is marked on the chart.
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The 41,500 level above continues to be a major barrier, and if we can break above there, then the market could really start to take off to the upside, perhaps opening up a move toward the 42,000 region. That is just another large, round, psychologically significant figure, and there's nothing particularly important about it, just that there will probably be a certain number of options barriers put in the way of traders in that region.
It would not surprise me at all to see Friday because there is even more volatility, but by the time we head into the weekend, we could see traders jump in and pick up a certain amount of position in order to keep the overall trend going. I have no interest whatsoever in trying to get short of this market.
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