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
More View more
Real Time News
  • Heads Up:🇹🇼 Unemployment Rate (AUG) due at 08:00 GMT (15min) Previous: 4.36% https://www.dailyfx.com/economic-calendar#2021-09-22
  • Heads Up:🇿🇦 Inflation Rate YoY (AUG) due at 08:00 GMT (15min) Expected: 4.8% Previous: 4.6% https://www.dailyfx.com/economic-calendar#2021-09-22
  • Heads Up:💶 ECB Non-Monetary Policy Meeting due at 08:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-09-22
  • ECB's Muller - ECB to discuss raising regular QE when PEPP ends $EUR
  • 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/SQUCCZ9dzS https://t.co/PcCwPMAcBv
  • 🇨🇭 Current Account (Q2) Actual: CHF 11B Previous: CHF 16B https://www.dailyfx.com/economic-calendar#2021-09-22
  • Heads Up:🇨🇭 Current Account (Q2) due at 07:00 GMT (15min) Previous: CHF 16B https://www.dailyfx.com/economic-calendar#2021-09-22
  • It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. Understand a pair's spread here: https://t.co/zEEUHZjVIG https://t.co/f6mraHu6zv
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjKWitK https://t.co/JMsJPQlQ3j
  • 🇳🇱 Consumer Confidence (SEP) Actual: -5 Previous: -6 https://www.dailyfx.com/economic-calendar#2021-09-22
Dow Jones Industrial Average Finds Support Post Jackson Hole

Dow Jones Industrial Average Finds Support Post Jackson Hole

Jeremy Wagner, CEWA-M, Head of Education

Talking Points

-Dow Jones Industrial Average (DJIA) sold off on Friday as Fed rate hike odds rise to 42% for September

-Technical picture remains bullish so long as prices are above 17,800

-18,300 is the next level of support to watch

Fed Chairwoman Janet Yellen has been talking up the possibility of September being a live meeting, suggesting a rate hike is possible sooner than later. If this happens, logic would dictate that the hike may become a head wind for DJIA which was why we saw stocks sell off a bit on Friday.

Taking a step back, Fed Fund futures are pricing in the chance of a rate hike at 42% for the September 21 meeting which is the highest odds in over the past 3 months. This suggests the markets have worked through the Brexit risks and worry and are coming out on the other side ok. This should come as no surprise as we highlighted the bullish potential and patterns 3 business days after the Brexit vote was cast, on June 29.

Additionally, with the US presidential elections a mere 2 months away, why is the Fed appearing to be in a hurry to raise rates? I have to wonder if this is more talk than action for September which opens the door for a rate hike disappointment on September 21.

Dow Jones Industrial Average Finds Support Post Jackson Hole

Chart prepared by Jeremy Wagner

From a technical perspective, prices did break down below the equal wave measurement and outside of the blue price channel. Therefore, we may see another drop towards 18,300. However, the medium term bullish patterns remain as this appears to be a technical correction. Therefore, we are anticipating these dips to be bought on an eventual push higher towards 19,700.

In fact, so long as prices remain above 17,800, we can look for support to form on an eventual break higher towards 19,700. Below 17,800 does not negate those bullish opportunities, but does begin to open the door to more immediate term bearish scenarios.

Bottom line, don’t let the near term noise distract from the medium term patterns. With the medium term patterns suggesting higher prices, use dips to position to the bullish side and establish better risk to reward ratios.

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

Good luck!

---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