Dow Jones - Trading 2025 Is Pretty Clear!Dow Jones ( TVC:DJI ) will create another green year:
Click chart above to see the detailed analysis👆🏻
For the past 15 years, the Dow Jones has been respecting two significant rising trendlines. With each of the previous cycles being around +80% and corrections always starting with the new year, everything is pointing towards another phenomenal stock market year.
Levels to watch: $50.000
Keep your long term vision,
Philip (BasicTrading)
D-DJI
Just enough to give bulls hopeWave C has retraced more than I was expecting, but it is just near the optimal range where Bulls are back into euphoria and Bears are afraid to short.
I am expecting to see a downward push soon, otherwise I have my clear invalidation level for this scenario. My overall downward target for this remains the peak made in COVID rally which i have shown in my previous weekly wave count of DOW.
DOW has a full Bull year ahead based on PRESIDENT'S CHEATSHEETDow Jones (DJI) has started the year on a positive note and that is anything but a coincidence. On this 1W chart you can see Dow's price action since the early 2009 bottom of the U.S. Housing Crisis.
That happened to be Obama's 1st year of Presidency. As you can see, 2009 was an incredibly bullish year with the index rising more than +60% from the year's bottom.
Four years later in 2013, which was the 1st year of Obama's 2nd term in office, Dow had again a strong year, rising by +25% (naturally the previous term was more aggressive as the market had tremendous upside potential to recover from one of the worst economic crises in history).
Moving forward again 4 years (2017), we can see yet another bullish (+35%) 1st year of Presidency, this time Trump's first term.
Biden also had his fair share of bullish 1st year of Presidency in 2021 (+23%).
The pattern is evident and shows the euphoria the market has when the U.S. President assumes his duties on his 1st year. It also shows that (excluding as mentioned 2009, which was natural to see a stronger recovery) on average it is fair to expect a price increase during the 1st year of around +25% to +30%.
In fact, the price action that led to the current 1st year of Presidency that has just started (Trump's 2nd term), is very similar to the one that preceded Obama's 2nd term (2013). Both formed a Channel Up after the 1W MA200 (orange trend-line) was tested and held. That pattern pushed the price higher until the 1st year of Presidency, that found the index on the 1W MA50 (blue trend-line). Even the 1W MACD sequences that preceded this, are similar between the two fractals.
As a result, investors have a strong reason to be bullish in 2025 and if pattern achieves the bear minimum of 2021 (+23%), we can expect to see 51000 by the end of the year.
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DOW JONES: Crossed above the monthly Channel Down. Buy signal.Dow Jones turned bullish again on its 1D technical outlook (RSI = 57.829, MACD = -79.310, ADX = 34.732) as it crossed over the Channel Down that is the bearish wave of the long term bullish trend. The 1W MA50 held and we have to go back to October 30th 2023 to find the last time that the index was under it. If the 1W RSI crosses above the MA trendline, we will confirm that most likely we are going to have a November 6th 2023 type of bullish breakout. The major rallies of the past years have been at least +20%. Buy and TP = 50,500.
See how our prior idea has worked out:
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DJI - ACCURATE TREND CAUGHTDow Jones Industrial (DJI) Accurate Trend Caught Using Risological Options Trading Indicator .
After a one sided 1100 points (SHORT side)
We are now seeing a Bullish reversal in the market, with 350+ points open P&L so far, and running.
The past two weeks have been painful for many traders and investors worldwide.
Share your personal experiences below.
All the best.
Weekly Leading Indicators are all GO BearPretty much enough said.
Warning given weeks ago.
Now it is turning.
ALL the leads are bearish, red flags ON
Just waiting for the playbook to pan out with a hard pull back. Last week we already saw the equity markets do a trend reversal pattern of Lower Highs and Lower Lows.
Time to deliver the main Bearish course...
Stay safe!
SG10Y - a peek into the next few weeks.As pointed previously for the last few years... the SG10Y Singapore Govt 10 year Bond Yields chart have an uncanny correlation to give us a heads up on when the US Equity markets like the S&P500 SPY SPX are going to keel over and drop.
On such instance is here and now.
A higher high and a clear breakout after a Fibonacci retracement, within a bigger retracement. This is a clear and present indication that (US) equity markets are going to keel over and drop.
Bears are just around the corner.
Pain till Mid-Feb
Heads up.
Combined US Equities - Critical Support Line BROKEN DOWNJust yesterday, the line was drawn and by the close of the day/week, it was done... the line broke with a close below.
So, zooming out into the weekly charts, and we see the TD Sequential starts for a Buy Setup (means bullish till end of Setup). Projecting a simple waterfall scenario brings US equities down to target at the TDST, and meeting a confluence of several support levels.
Noted MACD crossed down as is RoVD tapering down too.
This is the simplest straight line outcome.
Alternatively, might see a weak bounce for a lower high on the weekly charts and then the cliff fall in mid- to end-February.
Just need to know, then decide what to do.
On a seperate note.
The First 5 days of the trading week of January is part of the January Barometer where how January closes is how the year goes. and this ended DOWN.
Now, if January is ending DOWN as well, then you decide how 2025 is ending most likely.
Already obvious 2025 is challenging till September.
Watch for it and be wary.
All the best!
Combined US Equities - Critical Support Line drawnAs expected, not a good finish, not a great start.
Now, a potential trend change pattern might be forming. This pattern has a series of two of each Lower Highs (LH) and Lower Lows (LL). With that criteria fulfilled (LL 926 and 925.75), the Critical Support Line can be drawn at 925.75.
A breach and breakdown to close below 925.75 is likely to send the US equities market reeling over and down the cliff. This is the trend change pattern that is very reliable.
Noted that the RoVD indicator has crossed below the zero line, bearish.
Watch the Critical Support Line, and the TDST lines now...
Dow Jones Industrial (DJI): SHORT TRADETrade Overview:
The Dow Jones Industrial (DJI) chart presents a strong short trade setup on the 1-hour timeframe. Using the Risological Swing Trading Indicator , this trade successfully achieved TP1 (43,779.69) through TP3 (42,180.27), with TP4 (41,686.05) remaining highly probable based on prevailing market trends.
Key Levels:
Entry Price: 44,273.91
Stop Loss (SL): 44,673.77
Take Profits:
TP1: 43,779.69
TP2: 42,979.98
TP3: 42,180.27
TP4: 41,686.05
Market Sentiment:
The trade reflects bearish momentum, supported by broader market conditions indicating reduced risk appetite. The Dow Jones continues to exhibit a descending trendline and weaker market confidence.
The Risological Indicator identified precise entry, stop loss, and take-profit levels, enabling a disciplined and profitable trade execution. With three targets already achieved, the setup remains poised to capture further downside momentum.
DOW JONES: Rare Channel Up bottom buy opportunityDow Jones remains bearish on its 1D technical outlook (RSI = 40.772, MACD = -242.050, ADX = 47.872) as despite trading on the 1D MA100, it has failed yet to recover the 1D MA50. Technically though, the price action is sitting exactly at the bottom of the long term Channel Up and the 1D RSI has formed a bottom fractal identical to those of June and April 2024. The minimum target on those has been +7.65% but since we have the R1 level to consider as Resistance, that will be our target (TP = 45,000).
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DOW JONES Bullish accumulation below the 1D MA50.Dow Jones (DJI) has been trading within a Channel Up since the July 18 High. Right now the price is consolidating between its bottom (Higher Lows trend-line) and the 1D MA50 (blue trend-line). At the same time, the 1D RSI breached the oversold barrier (30.00) and rebounded.
This trading sequence has presented the most efficient buy opportunity since April 19 2024 and the even though all Bullish Legs that followed have been a little over +8.00%, the weakest one has been +7.63%. As a result, our current Bullish Leg Target of 45235 is formulated out of that minimum.
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What Is the DJIA, and How Can You Trade It?What Is the DJIA, and How Can You Trade It?
The Dow Jones Industrial Average (DJIA) is one of the world’s most recognised stock indices, often seen as a barometer for the US economy. Tracking 30 influential companies, the DJIA offers insights into market trends and economic shifts. This article explores what the DJIA represents, how it’s constructed, and how to trade it.
Dow Jones Definition
The Dow Jones Industrial Average, usually abbreviated to DJIA or DJI, is one of the most well-known stock indices globally, often called simply "the Dow." This index tracks 30 of the publicly traded companies in the US, including major names like Apple, Boeing, and Goldman Sachs. Designed to represent a cross-section of the American economy (although it does not include utilities or transportation companies), the DJIA provides a snapshot of market sentiment and economic health through the performance of these companies.
The DJIA was founded in 1896 by Charles Dow and Edward Jones, initially with 12 major industrial companies. Over time, Dow Jones Industrial Average companies evolved to include corporations across diverse sectors, though it's worth noting that these are all large-cap companies, meaning they have substantial market values.
Importantly, the Dow is price-weighted, meaning in DJIA, a stock’s price directly affects the index value — stocks with higher prices hold more influence over the index's movements than those with lower prices. So, a stock priced at $300 will impact the DJIA more than one priced at $100, even if the latter company is larger in overall market value. For example, high-priced DJIA stocks like Goldman Sachs or UnitedHealth often drive the index’s movements more than lower-priced yet substantial companies like Cisco. As a result, the index is unique compared to indices weighted by market capitalisation, like the S&P 500.
The Dow’s movements can reflect broader market trends, but it provides less of a complete representation of the economy or stock market than the S&P 500 or Russell 2000 since it includes only 30 companies. Nonetheless, traders often look to the Dow Jones index as an indicator of market strength or weakness. When these 30 companies perform well, it often signals broader economic optimism; when they struggle, it can be a sign of potential downturns.
Components and Weighting of the DJIA
The Dow Jones Industrial Average consists of 30 large-cap US companies across sectors like technology, finance, healthcare, and industrials. Changes to the DJIA’s stocks are rare but do happen when companies no longer reflect the US economic landscape. For instance, a business facing long-term decline may be replaced by a rising industry leader to keep the index relevant. These decisions are made by a committee that aims to ensure the DJIA remains a meaningful snapshot of the economy despite its relatively small roster of companies.
What Stocks Are in the Dow Jones?
As of November 2024, there are several notable and well-recognised companies in the Dow, including:
- Apple Inc.
- Microsoft Corporation
- Amazon.com Inc.
- The Coca-Cola Company
- Goldman Sachs Group Inc.
- Johnson & Johnson
- McDonald's Corporation
- Boeing Company
- Visa Inc.
- Procter & Gamble Co.
Factors Affecting the DJIA’s Movements
The DJIA can swing up or down due to various factors, reflecting shifts in the economy, company-specific developments, and broader market sentiment. The primary elements driving the index include:
- Economic Indicators: Key data releases, like GDP growth, employment reports, and inflation rates, directly impact the DJIA. Strong economic indicators tend to lift the index as they suggest a healthy business environment, while weaker data can pull it down, signalling potential challenges for major companies.
- Interest Rates: Interest rate changes, particularly from the Federal Reserve, play a significant role. When rates rise, borrowing becomes more expensive, which can reduce corporate profits and weigh on the Dow Jones Industrial Average’s stocks. Conversely, lower rates often encourage investment and consumer spending, which can boost the index.
- Corporate Earnings Reports: Quarterly earnings announcements from the 30 DJIA companies are critical. Positive earnings results can lift the Dow, especially if they beat market expectations and are from one of its pricier components. Conversely, disappointing earnings can drag down the index, especially if they reflect broader industry or sector weaknesses.
- Global Events: Major global developments, like geopolitical tensions, trade agreements, or health crises, can quickly shift market sentiment. For instance, the onset of the COVID-19 pandemic caused sharp declines in the DJIA as economic concerns spiked.
- Sectoral Influence: The DJIA’s performance can be significantly impacted by trends within particular sectors, especially those with higher-priced stocks. For instance, if several tech companies in the index perform well, they can drive up the DJIA, given their substantial influence.
- Market Sentiment: General market optimism or fear often moves the DJIA, influenced by factors like investor confidence, media coverage, and broader economic outlooks. Indicators such as the VIX (volatility index) can help gauge this sentiment and reflect periods of heightened volatility.
Trading the DJIA with CFDs
While traders have various ways to access the Dow Jones Industrial Average—from ETFs to futures—many prefer trading DJIA Contracts for Difference (CFDs) for their flexibility and accessibility. CFDs allow traders to speculate on the DJIA’s price movements without owning the actual assets in the index.
One of the benefits of CFDs is that they enable both long and short positions, so traders can potentially take advantage of rising or falling markets. CFDs also allow for leveraged trading, meaning traders can control a larger position with a smaller upfront investment. However, leverage amplifies both potential returns and risks, making risk management essential when trading CFDs.
For those interested in DJIA CFDs, FXOpen provides access to these contracts in our TickTrader platform under the Dow ticker WS30m, giving traders an easy-to-use, responsive way to monitor and trade the index.
How Traders Analyse the DJIA
Traders use several analysis methods to interpret the DJIA’s movements, aiming to understand trends, gauge sentiment, and identify potential trading opportunities. Some of the most common approaches include:
Fundamental Analysis
Fundamental analysis involves examining economic data and financial statements of DJIA companies. Traders look at metrics like revenue growth, earnings, and profit margins to gauge the health of the companies within the index. Broader economic indicators, such as unemployment rates or consumer confidence, are also essential in understanding how macroeconomic conditions may impact the Dow.
Technical Analysis
Many traders rely on technical analysis to spot trends and key price levels. Common tools include moving averages, which smooth out price data to identify direction over time, and support and resistance levels, which highlight areas where the DJIA price has historically paused or reversed. Trendlines help traders visualise the overall direction, and indicators like the Relative Strength Index (RSI) show whether the index might be overbought or oversold.
Market Sentiment and Positioning Analysis
Gauging the mood of the market is crucial, especially with an index as prominent as the DJIA. Sentiment analysis involves looking at factors like trading volume and indicators such as the VIX (volatility index), which measures market expectations for near-term volatility.
It’s also possible to interpret the positioning of traders in DJIA futures (expressed with the DJI ticker YM) via the CFTC Commitment of Traders report for insights into how various market participants are taking positions in the Dow. For instance, if the number of contracts held by non-commercials and speculators is positive, these participants are seen as bullish.
Correlation Analysis
Traders sometimes analyse correlations between the DJIA and other indices or assets. For example, the DJIA often moves alongside the S&P 500, but these correlations can shift based on economic or sector-specific developments. Through understanding these relationships, traders can anticipate how broader market trends might impact the Dow.
Risks Associated with Trading the DJIA
Trading the DJIA can be rewarding, but it comes with notable risks. One key risk is market volatility. Events like economic data releases, policy changes, or unexpected global events can cause sharp swings in the Dow’s value, creating opportunities but also increasing the chance of sudden losses.
Another risk comes from leverage, especially with derivatives like CFDs. While leverage allows traders to control larger positions with less capital, it amplifies both returns and losses. Even a small adverse movement in the DJIA can lead to significant losses if leveraged positions aren’t managed carefully.
Economic sensitivity is another factor. As the DJIA reflects the performance of large US companies, it’s highly sensitive to shifts in economic indicators like inflation and interest rates. A surprise rate hike or economic slowdown can affect the entire index, impacting all traders with positions in the DJIA.
Finally, liquidity risks can arise, particularly in after-hours trading when market depth is thinner. This can lead to wider spreads and increased costs for those looking to enter or exit trades outside standard market hours.
The Bottom Line
The Dow Jones Industrial Average offers valuable insights and trading opportunities for those interested in the broader US economy. With a clear understanding of its components, influencing factors, and trading approaches, traders can navigate the DJIA trading confidently. Ready to get started with our low-cost, high-speed trading environment? Open an FXOpen account and explore DJIA CFDs on a platform built for traders at every level.
FAQ
What Is the Dow Jones Industrial Average?
The Dow Jones meaning refers to a stock market index that tracks 30 large publicly traded companies in the United States. Known simply as "the Dow" and abbreviated to DJIA, it provides a quick view of the economic performance of some of the largest and most influential companies across various sectors.
What Does the Dow Jones Measure?
The DJIA measures the performance of 30 significant US companies, reflecting broader economic trends and investor sentiment. As a price-weighted index, stocks with higher share prices exert more influence on the Dow’s total value.
How Many Stocks Are in the Dow Jones?
There are 30 stocks in the DJIA, representing companies from diverse industries like technology, finance, and healthcare.
What Is the Highest the Dow Jones Has Been?
As of 7 November 2024, the highest Dow Jones ever was $43,823.10, marking a record peak for the index.
Is the DJI Publicly Traded?
The DJIA itself isn’t publicly traded, but traders can invest in its performance through ETFs, futures, and CFDs that track its value.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice
Combined US Equities - not nice end, not expecting a great startQuick analysis of the Combimed US Equities daily chart...
A significant rebound last week put the closing back into the decision box. Thing is, it went out the other end, as expected it would, BUT ended with a doji (indecision candlestick) and came back into the box... which suggest an exit to thru the lower end. This is abou to happen over the last days of the 2024.
And IF it exceeds the last low, then it is a tell all that 2025 is not going to be bullishly exciting.
In any case, a good retracement is overdue and likely comes in 1Q2025
Technicals here show weakening MACD and a decelerating rate of VolDiv.
Let's see how bullisht the first day of 2025 and the first week of 2025 can be... not terribly optimistic IMHO.
In any case... HAPPY NEW YEAR 2025 everyone!
Stay safe and stay happy!
DOW JONES: Ignore the pullback, this is a new bullish wave.Dow Jones turned bearish again on its 1D technical outlook (RSI = 41.280, MACD = -138.420, ADX = 33.278) as it failed to hold the 4H MA50 as support today and crossed under it. The 1D MA100 is coming in as the next level of support, which formed the Dec 18th-19th low. According to the 4H MACD, the index formed during those 2 days a bottom similar to of August 5th. As long as the 1D MA100 holds, it is more likely to see a bounce above the 4H MA50 again like August 13th. Our goal is a wave, so we're targeting the R1 level (TP = 45,000).
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DOW JONES What signals the top of this Cycle?Dow Jones (DJI) has been on a highly systematic pattern ever since the 2009 bottom of the U.S. Housing Crisis and this chart on the 3W time-frame depicts very accurately the symmetrical nature of the Cycles that the index is going through in the past 15 years.
As you see, ever since the October 2011 bounce on both the 3W MA50 (blue trend-line) and 3W MA200 (orange trend-line), Dow started a hyper aggressive Bull Cycle, which after making a Top on each phase, it broke below the 3W MA50 to become a buy opportunity again but has never yet broken below the 3W MA200.
So far we have completed three such phases and we are currently on the 4th. In the three that have already been completed, the Top of the Phase was signaled by the RSI. At a certain point that it broke above the 70.00 overbought barrier, it started a Channel Down comprised of 4 legs (a through d). On the (d) leg, it gave a signal that Dow had (or is very close to) topped. That was the ultimate long-term Sell Signal. Similarly, when the index broke below its MA50 and the RSI double bottomed, it has been the ultimate signal to buy.
Right now it appears that the RSI has completed Leg (a) and is starting the rise to Leg (b) of its newly emerged Channel Down. That means that the market has around another 12 months before it Tops again.
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DOW JOENS 1469 Points Secured on Risological BUY SELL IndicatorDow Jones Industrial (DJI) on a 15-minute timeframe captured significant profitable movements using the " Risological BUY SELL Indicator ". The tool effectively identified both bullish and bearish entries, allowing traders to secure impressive gains.
Highlights of Captured Trades:
584 Points captured in a downward move.
244 Points secured in a bullish retracement.
331 Points caught during a short trade.
310 Points profited in the final bullish rally.
The Risological BUY SELL Indicator demonstrated precision in marking key entry and exit points for high-confidence trading decisions.
Comment " FREE Trial " to get 7 days unlimited FREE trial of this indicator.
DOW JONES 13-year pattern that never failed eyes $48000.Dow Jones (DJI) gave us the best bullish break-out signal exactly 1 year ago (December 13 2023, see chart below), as our buy entry at 36577 hit our 42900 long-term Target last October:
At that time we made a clear point why that rally 'shouldn't surprise you' and it is because of this pattern's consistency for so many years. This 1W time-frame chart shows the cyclical behavior of the index, which peaks (Sine Wave top), then pulls back and starts forming a Rising Wedge (Sine Wave bottom) and when it breaks above the Rising Wedge, is where it flashed the bullish break-out signal we got a year ago.
As you can see it then starts a gradual rise on the BB20 and completes the Cycle again (Sine Wave top) after roughly a +47% rally. The title mentions that this pattern 'never failed', practically it only broke during the COVID flash crash, which was a non-technical event than occurs once every 100 years. As you can see even the 1W MACD sequences between the cyclical patterns are identical.
As a result, our Target towards the Sine Wave peak is 48000. If this is achieved in Q2 2025, based on Dow's current Channel Up (dashed), then we expect the index to remain on those high levels but turn more neutral sideways towards the end of 2025 and then eventual start of the new Bear Phase.
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Dow Jones (US 30) Pullback to Channel SupportChart Analysis:
The Dow Jones Industrial Average remains firmly within an ascending channel (green zone), with the current price nearing key channel support after a pullback.
1️⃣ Ascending Channel:
The price continues to respect the upward-sloping channel, which has been intact since mid-August. The lower boundary, near 43,450, is a critical support level to monitor.
2️⃣ Moving Averages:
50-day SMA (blue): The price is testing this level at 43,514, which aligns with the channel support, acting as confluence.
200-day SMA (red): Positioned at 40,705, reinforcing the broader bullish trend and serving as a long-term support zone.
3️⃣ Momentum Indicators:
RSI: Currently at 39.77, approaching oversold territory. A bounce from this level could signal renewed buying interest.
MACD: Bearish momentum persists, with the MACD line trending downward. However, traders may watch for signs of a crossover near support.
What to Watch:
A successful defense of the ascending channel support and 50-day SMA could provide a foundation for a rebound toward the channel's upper boundary.
If the support fails, the next significant area of interest would be the 42,000 level or the 200-day SMA near 40,705.
RSI movement and MACD signals will be key for confirming shifts in momentum.
The Dow remains within its bullish channel, but traders will be closely watching how price reacts to this critical support zone.
-MW