DAX 40 & DOW JONES: weekly analysis 13th – 17th November

<h2>Market movers</h2>
<p>The major US stock exchanges continue to push higher this week, with the Nasdaq100 posting the longest winning streak in two years, supported by the narrative that the Fed has peaked rates.</p>
<p>The economic calendar for the week will bring some particularly important data.</p>
<p>Let’s start on Monday 13 November with crude oil inventories; on Tuesday 14th we will evaluate the ZEW economic sentiment and the European GDP YoY. In the meantime in the US, inflation data will be released. The consumer prices index rose 3.7% YoY in the 12 months to September, which was better than expected, as rising oil prices boosted the price of petrol at the pumps. Economists expect CPI to cool again in October, with monthly CPI rising just 0.1%. The inflation figures come after the Federal Reserve left interest rates unchanged at a 22-year high and hinted that it could be at the end of its hiking cycle.</p>
<p>On Wednesday 15th, Japan will release its GDP and China will deliver its data on industrial production and retail sales. Retail sales in China grew at a solid pace of 5.5% annually in September, thanks in part to the stimulus measures from authorities. However, inflation data showed that consumer prices fell -0.2% YoY, indicating a weak demand environment. The markets will be keen to see whether consumption remains robust in October.</p>
<p>On Wednesday, across the pond, the UK will release inflation data. Consumer prices cooled to 6.7% YoY in September, over three times the BoE’s target level. The central bank sees inflation easing to just below 5% by the end of the year. In the United States, we will monitor retail sales and PPI figures.</p>
<p>On Thursday 16 November, we will hear a speech from the president of the ECB. In the United States, we will assess data on jobless claims, industrial production, and the Philly Fed indexes.</p>
<p>On Friday 17 November, it will be the European Union’s turn to release inflation data while we will be gauging building permits in the USA.</p>
<p>Throughout the week we will have speeches from members of the ECB and the FED.</p>
<p>The quarterly earnings releases will continue and this week the focus will be on large retailers like Walmart and Target. Walmart, which is a retailer’s value focus has attracted shoppers, including high-income households, in an inflationary environment. Even as consumers have pulled back from discretionary purchases, demand for consumer essentials has remained strong. Walmart is the largest grocer in the country, making half of its revenue from groceries, a consumer essential. Target, on the other hand, is facing challenges amid the situation with American consumers. The company has been hit harder by shoplifters, citing retail crime as a reason for closing nine stores just last month. The share price trades -27% YTD underperforming the market.</p>
<h2>Weekly analysis and market scenarios for DAX and Dow Jones</h2>
<p>Last week we left off with the American stock exchanges having posted their best performance since the beginning of the year. After this week we had two choices, either the bullish stance was confirmed or we could have witnessed a strong and sudden downward reversal. At the end of the past trading week, the US markets seem to have made their decision.</p>
<p>From the lows of the week of March 13, the rise of the international stock exchanges has been incredible. The thesis that supported a lead to a very strong climb until August 4th, the annual setup, was confirmed with almost millimeter precision. Everything occurred as we predicted, and between September 2022 and March 2023, all international markets posted their temporary lows (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 the month’s low and in that case, the market could rebound.</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.<br />
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&amp;P500 managed to end the trading week posting a significant rise, reaching levels not witnessed since September 20th. The index broke down the weekly resistance at 4411-4416. Prices closed in the 4424 area on Friday.</p>
<p>New supports in the 4420, 4411-4409, 4397, 4390-388 and 4371-4384 area, which becomes the new weekly support level.</p>
<p>The 4363 is confirmed, the breaking of this latter level could lead to swift corrections towards at 4334-4327, 4320-4315, 4303-4292 up to 4256, which remains a key support for the ongoing upward movement. Additional supports in 4244-4223, which is an overbought area, then 4190-4185 and 4164-4158.</p>
<p>Late November support of 4138-4124 is now the new monthly support. 4117 and 4100 are confirmed. The loss of the latter support could lead to heavy drawdown in the medium term.</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 area 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<br />
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 reached 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&amp;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 weekly resistance in the 4429-4432 area.<br />
Above the latter level, strong bullish pressures are still possible with targets for intermediate resistances in the 4454 and 4470-4503 areas. This remains the area to be recovered to witness the possibility of an upward movement in the medium term.</p>
<p>4510-518 is confirmed. Intermediate resistance in the 4525-4538 area and key resistance in the 4557-4564 area.</p>
<p>Confirmed 4575-4580 and the resistance offering a new bullish lunge in the 4595-4607 area. Resistances 4617-4622 and 4629-4632 are confirmed.</p>
<p>The upside targets are still 4662 and 4680, beyond which critical 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<br />
How to move? Even though price levels provided a strong bullish signal, only a recovery of the 4416 mark of the S&amp;P500 index on a monthly basis will confirm the possibility of a medium-term bullish reversal. We will carefully monitor the aforementioned levels on a weekly basis, paying close attention to price movements in conjunction with the most significant data scheduled on the economic calendar.</p>
<p><img decoding="async" fetchpriority="high" class="alignnone wp-image-27014 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Dax.png" alt="" width="1916" height="840" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Dax.png 1916w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Dax-300×132.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Dax-1024×449.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Dax-768×337.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Dax-1536×673.png 1536w" sizes="(max-width: 1916px) 100vw, 1916px" /><br />
<strong>DE40</strong> – Last week the German index witnessed new bullish pressures, managing to reach the resistance in the 15343-386 zone.</p>
<p>New supports in areas 15265-241, 15231-198 and 15130-097-070. The 15036-15000 zone was confirmed. Weekly support in the 14935-895 area. Additional supports in the 14874-801 and 14775-730 areas. 14662 and 14625-590 also confirmed.</p>
<p>Confirmed intermediate supports in the 14138-184, 14342, 14414-545 areas.</p>
<p>Critical area in 13814-781. The loss of the volumetric zone 14069-13974 opens the gateway to the 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>Additional critical supports are 12407-517 for the concentration of volumes. 12353-275 are<br />
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 resistance in the 15324 area.</p>
<p>Levels in the 15343-386, 15423-457 and 15484-547 areas confirmed (weekly).</p>
<p>Resistances in the 15588-687 and 15757-810 areas are confirmed.</p>
<p>15923, 15959-992 and 16024 confirmed. Above the latter, possible new price accelerations.</p>
<p>6054-104 is again confirmed. 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 15220, we could witness a chance for a continuation of a bullish movement on a monthly basis; below 14914, the trend will move firmly downwards again.</p>
<p><img decoding="async" class="alignnone size-full wp-image-27017" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Dow.png" alt="" width="1916" height="840" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Dow.png 1916w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Dow-300×132.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Dow-1024×449.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Dow-768×337.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Dow-1536×673.png 1536w" sizes="(max-width: 1916px) 100vw, 1916px" /><br />
<strong>US30</strong> – The index saw a strong rise last week, managing to close near the key resistance level located in the 34270-364-412 area.</p>
<p>New supports in area 34284-262, 34244-209 and 34135-33982.</p>
<p>Confirmed 33868-811, 33767-598, 33557-457 and 33384-192. Weekly support in area 33133-057. Other media in area 32896-792.</p>
<p>New monthly support in the 32771-650 area. Key supports confirmed at 32600-524 and 32393-331 areas.</p>
<p>Confirmed supports placed in two overbought 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>Resistance at 34364-412 is confirmed. The breakdown of this latter zone could lead to a massive rebound, up to the key resistance located in the 34617-779 area.</p>
<p>Confirmed 34801-833, 34868-913, 34985 and 35020-050.</p>
<p>35109 is confirmed, and a breakout above it could trigger a strong rebound. Additional resistances are at 35166 and in the 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 which is the 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 is very close to a turning point but we will have to be patient throughout the month of November. Therefore it is best to trade only riding high volatility, trying to avoid long sideaway movements. Currently, the bullish lunge remains intact so we will trade with a favorable trend.</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 href="https://www.keytomarkets.com/blog/analysis/dax-40-dow-jones-weekly-analysis-13th-17th-november-27013/">DAX 40 & DOW JONES: weekly analysis 13th – 17th November</a> appeared first on <a href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>