DAX 40 & DOW JONES: Weekly analysis 11th – 15th September
<h2>Market movers</h2>
<p>Last week, stock exchanges remained slightly under pressure, due to expectations of higher US inflation figures and with a likelihood of a less dovish FED at the September 20 meeting.</p>
<p>The coming week will unveil some macroeconomic data of a certain degree of interest.</p>
<p>The German ZEW economic sentiment will be released on Tuesday 13 September and comes as the outlook for the economy is deteriorating amid weak purchasing power, tumbling factory orders, and high interest rates.</p>
<p>On Tuesday, we will also evaluate the unemployment rate and the variation in job levels in the UK, as well as the GDP on Wednesday.</p>
<p>In the UK, wage growth hit a record of 8.2% in the three months to July, creating a sort of a headache for the BoE as it continues hiking interest rates to tame inflation. However, there have been signs of weakness seeping into the labor market, which could mean that wage growth will start to slow. Stronger-than-expected wage growth could fuel further rate hike expectations.</p>
<p>Returning to Wednesday, it will be the long-awaited day of the CPI data released in the USA. US inflation has unexpectedly risen in August, reaching 3.2% YoY from 3%, and core inflation is also proving stickier. Investors will watch closely on Wednesday, September 13, to see whether consumer prices continue along the cooling trajectory. Hotter-than-forecast inflation could fuel bets of a November rate hike.</p>
<p>Thursday will be the day of the ECB. President Lagarde will try to reassure the markets due to the problematic European economic outlook. Inflation is still over 2 times the ECB’s target, but with the risk of a prolonged economic downturn, another rate hike is less clear-cut.</p>
<p>The United States will release retail sales data on the same day, which is crucial for gauging the FED’s next decisions. Other important data to monitor will be the industrial production figures and the Michigan index, both scheduled for release on Friday.</p>
<p>Chinese data will also be crucial to monitor. Signs of a faltering economic recovery could drag on risk sentiment, particularly if Chinese authorities hold back from releasing aggressive stimulus measures.</p>
<h2>Weekly analysis and market scenarios for DAX and Dow Jones</h2>
<p>As we have mentioned repeatedly, we expected a decline from early August through the first ten days of September, followed by a rebound and another decline potentially extending into late September or early October. It was supposed to be a swift downward movement of around 5/7%. Everyone was supposed to be prepared for the rally leading to the formation of the annual high, likely commencing in December. Currently, we’re at a point in time where we’ve observed the recent holding and confirmation of weekly support. This marks a pivotal juncture until the next annual set-up at the end of November. Is an upward recovery for Wall Street possible as early as this week? It seems to be likely, although the seasonality of September evokes further declines until the end of the month.</p>
<p>Why are we heading south? This is the same old worry of inflation and higher rates for longer. Everyone is mumbling about a looming global recession, but this possibility takes time to materialize.</p>
<p>From the lows of the week of March 13, the rise of the international stock markets has been incredible. The thesis that supported a lead to a very strong climb until August 4th, the annual setup, was confirmed with almost millimetre precision. Everything occurred as we predicted, and between September 2022 and March 2023, all international markets posted their lows for the moment (which could also be the ten-year lows).</p>
<p>The next crucial days will be toward the end of the month, and we should monitor if we can reach this month’s low during the current week.</p>
<p>Beyond the rhetoric of the debt ceiling, the recession, and the banking crisis, only a decisive flip in sentiment could lead to a trend reversal. Earnings of US mega caps have shown off and many other companies are also ramping up the increase in revenue.</p>
<p>The average annual returns on international equities (World Stock Exchanges based on GDP) are around 11%. Current rates in America are more than 5%. With a projection for 10, 15, and 20 years, equity markets always beat bond markets. Therefore, we should be at the starting point of a 10-year bull market.</p>
<p>Rising interest rates won’t directly and inevitably lead to a recession. As long as these hikes are balanced with economic growth, there should be no danger. On the other hand, an exaggerated rate cut could drag down the markets for a long time.</p>
<p>The likely lows in October 2022 will have a high probability of remaining so for many years. They could represent the lows of the entire decade. Despite some short-term overbought, the markets are unstoppable and will be so for a long time. Here is why.</p>
<p>We have highlighted several times that stock prices tend to move at least 6/9 months before the economic cycle. For this reason, during the final part of 2022, the markets would have posted a significant bottom between June and October and then taken off again for the long term. The prices marked during the year had discounted the most unfavourable geopolitical and geo-economic conditions.</p>
<p>During 2023, we expect the following pattern to emerge: the low should be posted in January or during Q1 2023, and the high during Q4. Average market returns up to 20-25%.</p>
<p>As always, we will confirm the annual forecast from time to time.</p>
<p>Last week, the S&P500 index closed sharply lower, after trying to re-test the resistance located in the 4550 area, ending] Friday in the 4463 area and clearly forfeiting the rise that began on August 29th.</p>
<p>New supports in the 4461 area and 4454-4439, 4432-4425 are well confirmed, the level where the rise on August 29th picked up.</p>
<p>Confirmed 4409-4398-4387 and 4370-4355, which both become weekly. Below it, downward accelerations are possible, with the first target in the 4304 mark and filling the gap of mid-June. Confirmed the 4274-4263, and if these levels are to have trespassed, it will bring a downward acceleration toward 4249, then 4227-4223, the whole zone where volumes managed to concentrate for the upward lunge of end June.</p>
<p>Below 4223, there are high chances for further drawdowns targeting the supports at 4204 and 4196-4190. 4177-4170 is still a critical mark.</p>
<p>Confirmed the supports in 4153, 4144-4140, 4124-4117, and 4100 areas. The loss of the latter support could lead to heavy drawdowns</p>
<p>Confirmed the supports in 3930-3905-3899, 3945-3957-3961, 3979, 3993-4000, and 4032-4043 areas. The 4064-4075 areas remain a crucial support.</p>
<p>3890-3879 is still a critical zone because, in this specific area, buyers managed to concentrate. Additional support in 3864-3857 areas. Another intermediate zone is located in the 3822-3814 area.</p>
<p>Support in the 3808-3798 zone was confirmed, below which prices could start a new downward spiral.</p>
<p>Confirmed supports in 3669, 3680-3689-3701, 3711-3726-3733 areas.</p>
<p>3762 and 3711 are the monthly levels that support the current uptrend, so beware of any breakout of these levels: We could witness a new trend inversion.</p>
<p>The psychological support of 3600 remains crucial. The support at 3644-3651 has halted the fall and is now the monthly support after this solid uptrend. It shouldn’t be touched again, to avoid new and heavy downward movements. Below is the 3607 level. Then again, the 3557-3547, 3538-3524, and 3514-3507 are support levels. The 3485 support is now the annual, critical, and historical level for the S&P500 index. We will monitor whether this last level could stop, at least in the medium term, the bearish direction of the markets. Should we go beyond it, 3200-3300 will be the target, sought after by funds, investors, and traders halfway around the world.</p>
<p>New resistances in the 4461-4474 area. Intermediate resistances were placed in the 4479, 4485-4493 areas. Solid resistance in areas 4505-4518. From this level, it seems that there will be a possible upward movement. Other lightweight resistances in the 4528 and 4538-545 areas.</p>
<p>Confirmed the weekly resistance in the 4550 area. Additional resistances in the 4564, 4575-4580 areas, and the resistance that offers a new bullish lunge are in the 4595-4607 area. Confirmed resistances 4617-4622 and 4629-4632.</p>
<p>The upside targets are still 4662 and 4680, beyond which important resistance levels must be overcome before reaching new all-time highs.</p>
<p>The weekly closure above 4613 guarantees the annual trend reversal if confirmed on a monthly basis; the following targets remain 4717 and 4780.</p>
<p>How to move? We are at a turning point and we need to understand whether last week’s rally was false or it was a preparation for breaking through the weekly resistance levels. Everything is still on the table. The most critical date in September will be the 29th.</p>
<p><img decoding="async" fetchpriority="high" class="alignnone wp-image-25533 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-89.png" alt="" width="1916" height="840" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-89.png 1916w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-89-300×132.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-89-1024×449.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-89-768×337.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-89-1536×673.png 1536w" sizes="(max-width: 1916px) 100vw, 1916px" /></p>
<p><strong>DE40</strong> – Last week, the German index posted some bearish pressure after attempting to break the resistances at 15830-889 and 15912-970, from which we would have expected a vertical bounce above those levels. Prices closed the week in the 15736 area.</p>
<p>New supports in the 15675-590 area. 15554 and 15490-439 are well confirmed. Followed by 15152-196, 15247-287 and 15308-368 (weekly). These zones represent the strength of the yearly bullish strength and must be maintained for the movement to continue.</p>
<p>Supports in areas 14957-14844 and 14737-603 are confirmed. This area becomes the yearly level for new upward movements or heavy drawdowns.</p>
<p>Confirmed intermediate supports 14138-184, 14342, 14414-545.</p>
<p>Critical area in the 13814-781 zone. The loss of the volumetric zone 14069-13974 opens the way to monthly support in the 13621 area.</p>
<p>Solid supports in areas 13692-608, 13550-516, and 13457-410. Supports 13314-333, 13331-410, 13438-467 confirmed.</p>
<p>Confirmed volumetric supports in areas 12865, 12833-12909, 12978-13038, 13113-178, 13222-280, 13307-357.</p>
<p>Confirmed the supports in area 12808-766. From 12628 to 12766, there are a series of intermediate supports, helpful for long entry from pullbacks. 12566 becomes monthly support.</p>
<p>Other key supports are 12407-517, for the concentration of volumes, and 12353-275, the first bullish turning zone. Confirmed support in areas 12223 and 12136.</p>
<p>It was also confirmed support in the 19920-15006 area. This is 11875-11950-12024, which halted the price fall after the US CPI data on October 13th. Losing it would mean new bearish pressures and a touch of the weekly support in the 11766 area; with extensions to 11650 and 11542 below it. The 11095 mark could be a target in case of a massive sell-off. These levels can be considered annual reversal points.</p>
<p>New resistances in the 15717-750 area. This latter area will dictate the direction of prices depending on whether they will remain above or below this level by Friday. Next, resistances in the area 15797-837, 15873, and 15912-964. The recovery of this latter area could bring vertical bounces paired with the break of 15983-16024.</p>
<p>16054-104 confirmed and became new weekly support. Breaking these levels could lead to a fast rebound up to key resistance at 16225-253, where Tuesday’s 2 August gap will be filled. Additional resistances in the 16272-335 area, the breaking of which could lead to the annual highs in the 16517-475 area.</p>
<p>If by the following Friday, prices remain above 16104, we could witness a chance for a continuation of a bullish movement on a monthly basis; below 15544, the trend will move strongly downwards again.</p>
<p><img decoding="async" class="alignnone wp-image-25536 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-90.png" alt="" width="1916" height="840" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-90.png 1916w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-90-300×132.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-90-1024×449.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-90-768×337.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-90-1536×673.png 1536w" sizes="(max-width: 1916px) 100vw, 1916px" /></p>
<p><strong>US30</strong> – Last week, the index posted an extraordinary pullback, leading prices to an attempt to break through the resistance at 34871-958, but with no success. Prices closed in the 34605 area on Friday.</p>
<p>New supports in areas 34425-378. Confirmed 34322-201 and also 34159-059. Protecting these levels could result in a significant price rebound.</p>
<p>Additional supports in the 34000 and 33931-861 area, which become weekly.</p>
<p>Confirmed 33712-660 as monthly support and also 33559-434. The break of these zones could lead to bearish solid accelerations.</p>
<p>Other supports are placed in the area 33305, 33216-039, and 32975-858. Underneath, it will be possible to witness new bearish accelerations.Other supports in areas 32804 and 32725 are monthly supports.</p>
<p>Additional supports in the following areas: 32499-632, the loss of which could lead to monthly trend reversals. Following supports: 32801-875, 33945-990.</p>
<p>Confirmed supports are placed in two well-bought areas: 31197-497 and 31536-764. Other support areas are placed at 31753-920, 32111. The 31861 level still remains a key one.</p>
<p>31036-31125 is still to be considered critical support for the monthly level. Confirmed 30953-815, 30715-614, 30559-381, 30253-136, and 29696-29906.</p>
<p>The 29485 mark remains a critical one. In addition to the 29619-529 and 29338-29264, the support zones 29159-28876 and 28800-28685 are again kept. These are all excellent supports to look for long entry opportunities from pullbacks. Should they all be pierced to the downside, prices could move toward 28319, 28051, 27765, and 27019 in extension.</p>
<p>New resistance zones in the areas of 34536-643, 34725-839, 34853-911.</p>
<p>Confirmed the 34997-35109, whose break could lead to a new powerful rebound. Other resistances in the 35166 and 35273-378-444 area.</p>
<p>35539-591 confirmed. At 35620, the gap of August 2nd will be filled. Final resistance in area 35673-715.</p>
<p>The break of this monthly resistance zone opens the gateway to the 36068 weekly target.</p>
<p>Monthly positioning of the price above 35599-963 could offer a new bullish direction on a yearly basis. A movement that will go through 36529, managing to keep this level, would offer the possibility of reaching the 37000 area if prices forcefully break the last resistance placed in the 36786 area. Above 36236, we keep the possibility of further volumetric upward thrusts.</p>
<p><strong>IMPORTANT NOTE:</strong> The market has regained some important weekly resistance levels. Early September generally brings a major pullback period, so it will be possible to continue to witness further price rebounds. We would like to remind that an increase in volatility will bring prices down forcefully; and as a result, we will keep shorting the equity markets.</p>
<p>Also, this week, it is wise to note Monday’s openings and Friday’s closings for confirmation or denial of the current trend. Avoid overtrading and watch for volatility imparted by HFTs. Mark any gaps that may also appear during the week, with particular attention to those on Monday.</p>
<p>Happy trading!</p>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/dax-40-dow-jones-weekly-analysis-11th-15th-september-25541/">DAX 40 & DOW JONES: Weekly analysis 11th – 15th September</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>
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