Having supported prices for the last three weeks, the 29000 will be expected to continue to prop up the index. Prior to the surge, it had enjoyed strong support from 26000 which its most recent fall from the resistance at 29000, which allowed the index some support to rally back higher again. The fall has followed a strong period which saw the US30 index rally very well moving from a six week low to back above the key 28000 level and towards 29000, which offered stiff resistance again. The 29000 level also provided resistance to the US30 index in early September, when it was approaching its all time high set earlier in the year, and now it has finally broken through with an increase in volatility.
For the last three months, the US index has moved mainly between support at 27000 and resistance at 29000 and with the repeated attempts to break through 29000 being thwarted, it demonstrated how significant the most recent break through is. For a few weeks in July the US30 index met resistance at another key level of 27000 whilst bouncing off support at 26000, which is why the 27000 level is now offering some support to the index.
Throughout June, the index enjoyed solid support from another key level at 25000, while receiving some resistance from 26000 remaining in a range between these levels, up until the break a few weeks ago. Throughout April and May 25000 level had turned away the index on several occasions, reinforcing how significant the 25000 level had become in this period, and it has been able to provide some strong support to the index in the last month or so. Should the index decline further, the 25000 level will be expected to continue to offer support.
U.S. stocks have continued to maintain their high levels, as financial markets seem to have shaken off a disappointing U.S. jobs report last week. The U.S. economy added 245,000 jobs in November, which was significantly below a Dow Jones consensus estimate of 440,000. However, the unemployment rate matched expectations by falling from 6.9% to 6.7%. Serial market bull Ed Yardeni believes the U.S. equity market’s all-time highs are warranted, despite concerns surrounding the November jobs report and a record number of coronavirus cases. Speaking about the disappointing jobs data on CNBC, Mr Yardeni said, “I really wasn’t that disappointed. Government had a drop of almost 100,000 because census workers just had part-time jobs. Excluding that, we were up over 300,000. Wages were up, and the workweek held up pretty well.” “You’ve got the major central banks just pouring liquidity,” he added. “I’m not just watching the Federal Reserve balance sheet every week. I watch the ECB and the Bank of Japan. They’re all continuing to expand their balance sheets.” Despite his bullish stance, Mr Yardeni acknowledges a big part of the U.S. population is in dire need of another round of virus aid.
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