Dow Jones Worth Outlook:Dow Jones Forecast: Index Slips Forward of Traditionally Bearish MonthThe Dow Jones completed Monday buyi
Dow Jones Worth Outlook:
Dow Jones Forecast: Index Slips Forward of Traditionally Bearish Month
The Dow Jones completed Monday buying and selling simply -0.78% decrease than it opened because the VIX climbed modestly and the Nasdaq 100 edged barely greater on the again of energy from shares like Tesla. Whereas minimal, the losses chipped away on the month-to-month efficiency of the Dow Jones which was on tempo for a outstanding acquire of greater than 8%. Nonetheless, a 7.57% acquire for the month of August – usually one of many quieter buying and selling months – is a powerful feat given the broader market backdrop.
September Sometimes Sees an Enhance in Volatility
Supply: John Kicklighter, Bloomberg
That mentioned, August’s remaining buying and selling day may very well be an early indication of a bigger shift available in the market because it gears as much as transition from a number of the calmest months to a number of the most rocky. To that finish, September just isn’t solely risky, however can also be the weakest month for US equities from a return perspective during the last 40 years in accordance with historical past.
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Whereas previous efficiency just isn’t in any manner indicative of future outcomes, seasonality definitely performs a job in market exercise and the looming US Presidential election may assist exacerbate a number of the themes established in years previous.
Volatility Anticipated to Rise within the Weeks Forward
Suffice it to say, the Dow Jones, S&P 500 and Nasdaq 100 might have their work lower out for them within the coming weeks. Nonetheless, the Dow Jones has proven little indication it can immediately reverse decrease in earnest, so extra consistency from bears could be required to shake the resolve of the bullish majority.
Dow Jones Worth Chart: 4 – Hour Time Body (Could 2020 – August 2020)
Such conviction could be established by attacking numerous areas of assist that reside beneath the present buying and selling value. Psychological ranges, prior highs and ascending trendlines are simply a number of the potential areas of buoyancy beneath and bears should check every earlier than a bigger decline could be made. Within the meantime, observe @PeterHanksFX on Twitter for updates and evaluation.
–Written by Peter Hanks, Strategist for DailyFX.com
Contact and observe Peter on Twitter @PeterHanksFX