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.

Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Mixed
Wall Street
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
Gold
Bearish
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
GBP/USD
Mixed
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
  • U.S. Market Analyst at https://t.co/JsVsSmefgR, Shain Vernier covers - ✔️ Safe haven assets in volatile markets ✔️ Central banks and governments ✔️ How will commodities trade in a recession Only on Trading Global Markets Decoded #podcast. Tune in here: https://t.co/1UmEzEbwiy https://t.co/EIC9YqfTec
  • Anybody else think that casting directors in movies are some of the most underrated people when it comes to giving a film/series credit?
  • No https://t.co/EoBltaP17k
  • Crude #oilprices may face heightened liquidation pressure as the cycle-sensitive #commodity finds itself under the pressure of resilient resistance and a vulnerable, multi-week rising channel. Get your crude #oil market update from @ZabelinDimitri here: https://t.co/cGPX4qcOH1 https://t.co/0U4JMJVFuf
  • The @ecb will likely boost its Pandemic Emergency Purchase Program at Thursday’s meeting of its Governing Council; a move that could give the #Euro a lift. Get your currencies market update from @MartinSEssex here: https://t.co/I4PbmJNG1z https://t.co/hu6Ld1KdDB
  • $GBPUSD doesn’t have the cleanest set of technical indications, but #USD may give indications if it can break its trading range via the $DXY. Get your currencies market update from @PaulRobinsonFX here: https://t.co/PrC9wAaXvU https://t.co/vHYHflwqR3
  • The ongoing contraction in US production may keep #oilprices afloat in June as crude output falls to its lowest level since October 2018. Get your crude #oil market update from @DavidJSong https://t.co/jj1bMLX0DF https://t.co/O9NOqbfHkb
  • watching the #SpaceX launch🍿
  • Major investment bank models have touted USD selling, given the outperformance in US equities relative to its counterparts over the past month. How is this likely to impact the month-end rebalancing? Find out from @JMcQueenFX here:https://t.co/MtNrHmXZpD https://t.co/d00z4019XE
  • The medium-term #gold outlook still seems favorable as the #Fed, #ECB and more keep rates around 0. Immediate event risk ahead includes the #RBA and #BoC interest rate decisions, US jobs data and Brexit. Get your gold market update from @ddubrovskyFX here: https://t.co/ABXy78LmUn https://t.co/rCALcGaKOL
The Fed Cries 'Wolf' - Dow Jones Industrial Average Retests Highs

The Fed Cries 'Wolf' - Dow Jones Industrial Average Retests Highs

2016-12-15 20:04:00
Jeremy Wagner, CEWA-M, Head of Education
Share:

Talking Points

-Fed hikes rates for first time since December 2015; Dow Jones Industrial Average recovers from initial losses

-Higher probability patterns suggest continued strength

-Pattern remains bullish while prices are above 18,600

The Federal Reserve raised its key interest rate on Wednesday for the second time since 2008. Though the rate hike was widely expected, traders placed focus on the Fed’s projections for rate hikes in 2017.

The Fed appears to be remaining aggressive with three rate hikes planned in 2017.

It is worth noting that in December 2015, when the Fed hiked rates for the first time since 2008, the Fed projected four hikes in 2016. Well, 2016 will pass with only one hike registered which occurred on Wednesday.

Therefore, the Fed has been talking a more aggressive game of hikes versus what is actually delivers. The aggressive forecasts by the Fed could be like the little boy crying wolf. After a while, the townspeople grow numb the boy’s chants and do not take the real risks seriously.

For now, Dow Jones Industrial Average (DJIA) shrugged off the rate hike. DJIA is currently retesting all-time highs and pressing 20,000.

The rest of this article will be technical in nature. If you wish to read our outlook for equities, grab a copy here.

From a technical perspective, DJIA is in an uptrend and the bullish pattern appears incomplete. Back on June 29, we highlighted a medium term bullish pattern that could drive DJIA to 19,700 and possibly 21,000.

Now that we are near the first target, the market is at risk of a pull back, though the pullback would fit as a correction within the uptrend.

We have a wave relationship showing up near 20,044 and of course psychological round number resistance of 20,000. If a pullback materializes, DJIA may drop towards 19,000-19,250. Above 20,000 and the next level of wave relationships arrive near 21,378.

The bullish outlook remains strong so long as we are above 18,600. If the market moves below 17,500, then the bullish outlook is abandoned.

If you wish to join Jeremy in his US Opening Bell webinars to discuss this market, register and join here.

Dow Jones Industrial Daily Chart

The Fed Cries 'Wolf' - Dow Jones Industrial Average Retests Highs

Created using TradingView

---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

News & Analysis at your fingertips.