The Dow Jones 30 broke the important psychological level of 30,000 yesterday for the first time and, in early trading today via US future markets, there are indications another wave of positive momentum may be seen. Speculators need to understand that the long Thanksgiving holiday which starts tomorrow in the US will have an effect on trading today, as investment houses place positions before the long weekend ahead. There will be no trading in the US tomorrow and volumes will be low on Friday.
Traders should expect some volatility today as record highs on the Dow Jones 30 are tested and financial institutions try to capture momentum before escaping for Thanksgiving. The famous index did test the 30,200 level yesterday, but saw a swift reversal lower develop from this lofty height. However, that doesn’t mean the value above won’t be broken higher the next time around. Values have sustained above the 30,000 mark for the time being too.
Risk appetite increased early this week in the US after President-elect Joe Biden began to publicize key cabinet positions with names of the individuals who will be in charge. His nomination of Janet Yellen as head of the US Treasury added a familiar face to the future administration, which may be helping investor confidence short term.
Speculators wishing to stand in front of the existing trend and sell the Dow Jones 30 may want to think twice before becoming overly speculative today. If a trader wants to pursue a selling position, they should use a trending limit order which tries to follow momentum and not bet on sudden reversals to simply appear. Risk-taking and risk management will be important today and trading volumes are likely to be heavy early.
Speculators should also note that because of the holiday, trading sometimes starts to grow silent late on the Wednesday before Thanksgiving starts; this is because many traders typically leave their offices early in order to begin enjoying their vacation. However, because of coronavirus leaving many investors to work from home and with a limited ability to travel during this holiday, it might mean trading remains rather volatile all day. Speculators who want to buy into the Dow Jones 30 cannot be faulted. Traders may want to wait for slight pull backs in order to capture a bigger climb upwards, but there is a chance they could miss a trading opportunity too by waiting too long.
Dow Jones 30 Short-Term Outlook:
- Current Resistance: 30100.00
- Current Support: 29975.000
- High Target: 30250.000
- Low Target: 29850.000
