Current trend

The Dow Jones Index is correcting in a local uptrend at 42008.0, supported by the US Federal Reserve's decision to cut interest rates by 50 basis points, which in the long term will lead to a weakening of the debt burden and a reduction in the cost of borrowing for national companies.

The upward trend will likely be strengthened by the situation on the labor market, where Initial Jobless Claims fell to a minimum of 219.0 thousand over the past four months from 231.0 thousand last week, and Continuing Jobless Claims fell to 1.829 million from 1.843 million previously, which is significantly lower than the forecast of 1.850 million. The Federal Reserve Bank of Philadelphia also published positive results: the Manufacturing PMI in September rose to 1.7 points from –7.0 points a month earlier.

The bond market responded to the results of the US Federal Reserve meeting by strengthening the downward trend: the yield on 10-year debt securities fell to 3.713% from 3.898%, 20-year ones to 4.102% from 4.268% two weeks earlier, and 30-year ones to 4.047% from 4.190%.

The growth leaders in the index are Salesforce Inc. ( 5.37%), Caterpillar Inc. ( 5.12%), Goldman Sachs Group Inc. ( 3.97%).

Among the leaders of the decline are Coca-Cola Co. (–1,57%), Procter & Gamble Company (–1,37%), Walmart Inc. (–1,25%).

Support and resistance

On the daily chart, the index quotes continue their corrective dynamics, again approaching the resistance line of the ascending channel with boundaries of 42200.0–39000.0.

Technical indicators that support the upward signal are gradually strengthening it: the range of EMA fluctuations on the Alligator indicator is expanding, and the AO histogram is forming new upward bars, being held above the transition level.

Support levels: 41550.0, 39950.0.

Resistance levels: 42380.0, 43800.0.

Trading tips

If growth continues, long positions that can be opened if the price overcomes the channel resistance at 42380.0 with a target at 43800.0 and stop-loss at 41900.0 will be relevant. Implementation time: 7 days and more.

If the asset reverses and continues declining and the price consolidates below the local support level of 41550.0, short positions can be opened with the target at 39950.0. Stop-loss — 41800.0.