Wednesday, December 12, 2018

DOWJONES - 12 December 2018


Fundamental Highlights

The Dow Jones Index recovers from a 500 point slide that had it below the 24,000 mark for the first time since June. The index closed mostly lower however after some fluctuation as investors react optimistically to a phone call of trade talks between US and Chinese Officials. Chinese government proposes to reduce tariffs from the current 40% to 15% on US auto, giving a lift to the blue chip index before falling back down to prospect of government shut down after Trump and Democratic leaders disagree on border security. Big swings are expected to continue within the US equities market as no conclusive resolution will be made between the two economic giants. Today’s US economic data release of Core CPI sheds further light on inflation which could prompt the Fed’s next move while crude oil reports should leave an impact on the US market with its positive correlation.

Technical Analysis

Technical outlook on the Dow Jones remains bearish, however the index is extending its consolidation period in the near term and hovers between 24,775 and 24,255 as it struggles to find direction. 20MA is close to crossing above the longer 100MA indicating a possible short term uptrend. If the index holds itself above 24,500, it could move to the upside before meeting resistance at 24,881. Surpassing this level will indicate strong presence of buyers and push the index to further resistance levels of 25,010 at the 200 moving average.

Support: 24235 / 24120
Resistance: 24881 / 25010

Chart (H1)