New Highs for the Dow Jones?
The DJIA is giving us a beauty of a rotation
Obviously traders, investors and everyone in between are hitting the road and doing some traveling. Volumes are plunging across the board and to be honest, it’s no surprise.
We’ve seen the S&P 500 and Nasdaq notch new all-time highs. Is now it the Dow’s turn? It’s giving us a strong rotation as we speak.
I continue to preach that “less is more” right now. That’s giving us less setups, but ones that are higher quality, thankfully. I’ll take that all day long. However, this is a setup we should be looking at.
Trading the Dow
Above is a weekly chart of the Dow futures (YM), but the same setup applies to the Dow Jones ETF (DIA).
Three weeks ago, the YM broke below the 10-week moving average and traded down to the 21-week moving average, which held as support. In the following week, the YM bounced off the 21-week, reclaimed the 10-week and closed within a few points of the prior week’s high.
On a 35K-point index, that’s pretty impressive (and tight).
So far this week, we’ve had a dip down to the 10-week moving average that held as support and then a push through the last two weeks' highs. In other words, we have a two-times weekly-up rotation.
From here, I want to see the 10-week continue to hold as support and I want to see a push higher. 34,750 is my first area of interest, but I would really like to see 35,000 print as our first price target zone. If achieved, we can raise our stop-losses and adjust for a potential rally to new all-time highs.
Cheers!
Disclaimer: Charts and analysis are for discussion and education purposes only. I am not a financial advisor, do not give financial advice and am not recommending the buying or selling of any security.