dow jones
The Dow Jones Industrials hit record highs on Friday after unexpectedly weak U.S. jobs data reinforced the Fed’s decision of last week to delay the tapering of the quantitative easing program.
For April, the U.S. jobs report showed that the U.S. economy added only 266,000 jobs, a decline from the 770,000 added in March. The unemployment rate rose from 6.0% in March to 6.1% in April.
Accordingly, April’s jobs report has reinforced the low-interest policy of the U.S. Federal Reserve. Low-interest rate cheapens cost of capital for business, market investing, and stock trading and attracts capital away from the bond market and into indices such as the Dow Jones. Companies listed in the Dow Jones will also benefit from cheap financing and stimulus packages within the Q.E. programs.
This is why the Dow Jones Industrials and other U.S. indices are hitting record highs.
The Dow Jones Industrial Average advance comes as the price broke the symmetrical triangle at the 34000 price level. The next target for the Dow is the 35000 psychological resistance. If price crosses this level, we could see targets down the road at 35109 and 36392 (141.4% and 161.8% Fibonacci extension levels).
On the other hand, a correction finds its initial target at the 34000 psychological support, where the triangle’s upper border is located. Below this area, we may see additional downside targets at 33249 and 32666. The 25 March low at 32084 is also a potential downside target.
