Dow Jones
The stock market corrected recently, and Dow Jones was one of the markets that underperformed. It failed to make a new all-time high, despite the S&P500 and Nasdaq 100 already did that in 2020. Still, there is not too late for the Dow Jones to make another attempt above $30,000, considering that the series of higher lows and higher highs remains in place.
The Dow Jones index struggled the last couple of weeks just like the U.S. entire stock market did. But good Chinese industrial production data released over the weekend contributed to positive sentiment in Europe, something likely to continue in the North American session too.
Over the weekend, the New York Times revealed that President Trump paid only $750 in income tax in the year he got elected. There is not a coincidence that such news comes out ahead of the first U.S. presidential debate scheduled this week. Moving forward, expect the stock market to react strongly to every piece of news related to the presidential election.
On September 29th, the first presidential debate will be closely monitored by market participants. This is a ninety-minute long debate with no advert breaks, and the two candidates likely to cover topics important for the market – position on China, coronavirus response, etc. Expect huge market gyrations during the debate, with increased volatility.
The technical perspective looks bearish short-term but bullish in the medium term. The only thing bulls need is for the price to break the short-term bearish channel before deciding to go on the long side.
As such, bulls would like to see a break above 28,000 before going long with a target above 30,000. In this case, the invalidation level is 27,000, for a risk-reward ratio of 1:2.
For more about how technical analysis works, consider our trading coaching program.
