News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Bearish
GBP/USD
Bearish
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • The continuity seen across these volatility cycles is a good thing. Historical precedence offer a blueprint for identifying conditions supportive for a vol-event to occur, and how they may unfold. Deepen your knowledge of historical volatility here: https://t.co/vg7w10CKUR https://t.co/9JVh6BsWa2
  • There’s a strong correlation between interest rates and forex trading. Forex is ruled by many variables, but the interest rate of the currency is the fundamental factor that prevails above them all. Learn how interest rates impact currency markets here: https://t.co/J0EPMD2Cfi https://t.co/ZDuee58Abe
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/BdgFmkRxVw https://t.co/niJL2W2yXV
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/0rNbbrd58e
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here: https://t.co/9S5tXIs3SX https://t.co/zPzJAxBJxt
  • Emotions are often a key driving force behind FOMO. If left unchecked, they can lead traders to neglect trading plans and exceed comfortable levels of risk. Read on and get your emotions in check here: https://t.co/eILWbFgHRE https://t.co/uf6KEYTes5
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here: https://t.co/reRmDe1Ksp https://t.co/gRjdVfbg66
  • Implementing a trading checklist is a vital part of the trading process because it helps traders to stay disciplined, stick to the trading plan, and builds confidence. Learn how to stick to the plan, stay disciplined, and use a checklist here: https://t.co/SQUCCYRCIk https://t.co/mLLGqYUygY
  • Use this technical analysis pattern recognition skills test to sharpen your knowledge: https://t.co/Qgz89PTxnu https://t.co/HUYJzEkYiT
  • #Gold prices put in a major breakout last month and, so far, buyers have held the line. But a really big Fed meeting is on the calendar for this week. Can Gold bulls hold? Get your market update from @JStanleyFX here: https://t.co/NGRTSfceOW https://t.co/QkSUORIQE2
Dow Jones Industrial Average Keeps Punching All-Time Highs

Dow Jones Industrial Average Keeps Punching All-Time Highs

Jeremy Wagner, CEWA-M, Head of Education

Talking Points

-Dow Jones Industrial Average (DJIA) closes at all-time high again yesterday

-Fed rate hike expectations now near a similar level for December 2016 as they were BEFORE the Brexit vote

-Anticipating an eventual break higher towards 19,700-20,000 though a dip to 18,167 cannot be ruled out first

Dow Jones Industrial Average tacked on another close to all-time highs yesterday. The daily moves have become less extreme over the past week as the market is digesting its gains near measured wave relationships. One thing noted this morning is that the Fed rate hike expectations have been creeping higher. What is interesting to me is that Fed Fund futures is pricing in a 45% probability of a hike in December 2016 which is nearly the same probability as 1 month ago BEFORE the Brexit vote was cast.

So in the past month, the Brits vote to exit EU, the world gasps in anticipation of a collapse then breathes a sigh of relief and Fed Fund futures are back to the pre-Brexit vote levels. Taken in isolation, Fed Fund futures suggest nothing has really changed. To a degree, that is correct. Though a UK exit from EU is anticipated to take place, the article 50 which is the formal paperwork hasn’t been filed yet and is not expected to be filed prior to the end of 2016.

Dow Jones Industrial Average Keeps Punching All-Time Highs

Therefore, equities breathe a sigh of relief as a formal UK exit from EU isn’t expected to progress forward in the short term allowing traders to focus on something else. As a result, we’ll likely see a struggle in the central bankers between adding stimulus in anticipation of the boogey-man in the closet versus sticking to the data that shows a growing economy.

From a technical perspective, the levels identified yesterday in US30, a CFD which tracks the DJIA, are still valid. We eventually are anticipating a meaningful break higher towards 19,700, though a dip towards 18,167 first cannot be ruled out.

Suggested Reading: All Time Highs are Hard Work

Sentiment, measured by SSI (pictured above), is still showing about 90% of the retail traders positioned short as they have been for the most part of July. Typically, sentiment (SSI) is a contrarian indicator and suggests more gains are coming for US30. (Learn more about trading with SSI here.)

In the meantime and since we are near a measured wave relationship at 18,575, intraday traders may be interested in checking out Grid Sight Index to help determine intraday momentum changes. Check out US30 on ‘m3’ or ‘m5’ via GSI here.

Suggested Reading: Dow Jones Industrial Average Punches Back After Brexit Collapse

Interested in a longer term outlook for equities? Download our quarterly forecast here.

Do your losing trades overshadow your winning trades? Learn about the psychology behind why that might be happening in our Traits of Successful Traders research.

---Written by Jeremy Wagner, Head Trading Instructor, DailyFX EDU

Follow me on Twitter at @JWagnerFXTrader .

See Jeremy’s recent articles at his Bio Page.

To receive additional articles from Jeremy via email, join Jeremy’s distribution list.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES