Indices Forecast: #DowJones30,#DAX,#FTSE100 (29 Jan 2024)

FTSE 100 Forecast: FTSE 100 Heading Toward Top of Range Again

FTSE 100 bullish, breaks 7600, eyes 7800 level. Pullbacks to 50-Day EMA are buying opportunities. Potential rise to 8000 if 7800 surpassed.

• The FTSE 100 has been very bullish during the training session on Friday, as we broke above the 7600 level.
• The 50-Day EMA has been broken through and it’s likely that we continue to go higher, at least until we get to the 7800 level.
• The 7800 level has been an area of extreme resistance previously, it would make a certain amount of sense that it holds as a bit of a barrier.

Breaking Above 7800

If we were to break above the 7800 level, then I think it opens up a move to the 8000 level in the FTSE 100, as momentum in a certain amount of “FOMO trading” could come back into the market and send the index much higher. This of course will be in conjunction with a lot of other indices around the world as they all look very bullish, as traders are waiting to see whether or not central bankers are going to do everything, they can to loosen monetary policy.

It is worth noting that the British pound has been rather stagnant, so we will have to see how that plays out. If the British pound suddenly starts to pick up momentum against the greenback, it’s possible they could put downward pressure on this market, but I think there is a significant amount of support near the 7400 level and that would be your first floor. Underneath there, you have the 7230 level which is a massive support level that I do not think it’s broken anytime soon. In the short term, I still think we go higher.

DAX Forecast: DAX Continues to Be “Buy Only”

DAX shows recovery, targeting 17,000 euros. Market bullish with ECB easing expected. 50-day EMA at 16,500 euros provides support. Traders focus on central bank actions.

• The German DAX initially pulled back just a bit during the trading session on Friday, but then turned around to show signs of life again.
• It looks to me as if the market is trying to do everything it can to challenge the 17,000 euro level.
• And I think at this point, we will continue to respect it, at least in the short term.
• However, in the longer term if we do break above there then it opens up another 500 euros higher.
• It is very possible that short-term pullbacks present themselves as buying opportunities, and that's exactly how I would look at this market.

Bullish Flag?

We have seen a bit of a bullish flag somewhat kick off, and I do think that the buyers continue to flock towards the DAX, understanding that with Germany entering the recession, it's very likely that the ECB will begin to loosen monetary policy in the next several months. As a general rule, traders are trying to do everything they can to front run what the central banks are doing. And I think this is a scenario where you just look at this through the prism of volatility and of course, liquidity. If liquidity is going to continue to be pumped into the system, stocks typically go higher.

The 50 day EMA is approaching the 16,500 euros level. So therefore, I think it's a bit of a floor in the market. In general, this is a market that I think will be choppy and noisy, but you cannot sell in this market. It's very difficult to imagine a scenario where you would get short. We would have to see some type of meltdown. And although not impossible, it seems very unlikely in this current trading environment. It's a completely risk-on environment as traders out there continue to bank on central bankers out there willing to help them out. This has been the game in New York for years, and the Europeans are now starting to trade the same way. I like the DAX overall, mainly because it has a lot of momentum, and the idea of liquidity being pumped into the markets. The markets will continue to look for higher levels, and therefore it is a market that will continue to see value hunters in this chart.

Dow Jones 30 Forecast: Dow Jones 30 Continues to See Buyers

Dow Jones rallies with support at 37,800, aiming for 40,000. Fueled by hopes of Fed intervention, market remains volatile but bullish.

• You can see that we initially pulled back a bit during the trading session here on Friday, but we continue to rally in the Dow Jones Industrial Average as we see a lot of money being pumped into the system.
• And of course, people are starting to bet on some type of recovery via central bank intervention.
• What I mean by this is that the Federal Reserve comes in and liquefies the markets. Therefore, industry starts to pick up with all that cheap money and traders will continue to play the large industrials as a sign of recovery.

Federal Reserve

As long as traders believe that the Federal Reserve is coming to the rescue with loose monetary policy, it does make sense that stocks continue to climb. Remember, unlike the S&P 500 and the NASDAQ 100, the Dow Jones 30 is a much more even keel look at the overall economy as it is only 30 stocks. Ultimately, I do think that this is a market that remains buy on the dip, but I think that is probably the same with just about any other stock index that I look at right now, especially American ones. However, the Dow Jones has just broken to fresh new highs, and therefore it makes a lot of sense that we would see some potential “FOMO trading.”

Every time this market pulls back, I am a buyer and I believe that the rest of the trading public feels the same way. I don’t see this market changing attitude anytime soon, but it is a market that could end up being volatile, so prepare accordingly.

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