Dow Jones Forecast: Applauds CPI Figures

(MENAFN– Daily Forex) The dow jones 30 has rallied during the trading session on Thursday, as we have seen industrials recover after the CPI numbers came out right in line with expectations. There is now a belief that the Federal Reserve will only raise by 25 basis points in February, and that has people buying risk assets, the Dow 30 included.

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The index is currently breaking a bone of the 34,000 level, and it looks like it is going to try to do everything it can to get to the 35,000 level. That’s an area where we had seen a lot of resistance to jumping back into the market, so it will be worth paying attention to. I do believe at this point it is probably only a matter of time before we get the opportunity to test that area, so now the question is going to be whether they can break above it. If they can, then I anticipate that the market will find itself in a very strong bullish run, perhaps picking up another 1000 points rather quickly.Volatility is Going to Get Worse

  • It does make a certain amount of sense considering that Wall Street has not had to run on fundamentals for years.
  • It’s all been about liquidity, and of the federal reserve is suddenly going to slow down its tightening cycle, that of course gets everybody excited.
  • In that scenario, we have a situation where the old story of buying liquidity comes into the picture.

On the other hand, if we turn around and wipe out the candlestick from this very bullish turnaround during the Thursday session, that would be a bad sign and probably would have the Dow 30 looking to reach the 50-Day ema , currently trading right around the 33,200 level. I do believe that we will probably have quite a bit of volatility , but that will be nothing new considering just what a mess trading has been for the last couple of months. On one hand, you have people paying attention to the economy who believe that it influences the stock market, and on the other hand you have people that are only wishing for more liquidity and are looking at every opportunity they can to get bullish of any type of risk asset. Volatility is going to get worse, not better.

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