S&P 500
Dow Jones defied gravity once again as it rose to record highs despite the U.S. Capitol being under siege yesterday. Once again, the market seems to be completely disconnected from the reality on the ground, to the frustration of many.
The ADP numbers yesterday showed that the private sector lost 120k jobs on expectations of adding 60k. The bad news, though, was not enough to send Dow Jones lower – just the opposite. Considering that the NFP is due tomorrow, the implications are that the NFP will also miss expectations.
Yesterday’s rally in the Dow was fueled by expectations of infrastructure investments from the Democratic leadership now that they got control over the Senate. It means that they can pass legislation easily and without much opposition, and that will spur economic growth faster than otherwise would be the case.
The technical picture reveals a resilient Dow Jones. After the November vaccine news, the Dow kept reaching new highs, albeit only marginal ones. It managed to keep the higher highs and higher lows series intact, a bullish development.
However, even in a rising channel, bears may try their hand at dynamic resistance. As such, aggressive bulls may want to sell at market with a target at the lower edge of the rising channel and a stop 31,400-31,600 area.
