DAX 40 & DOW JONES: weekly analysis 20th – 24th November

<h2>Market movers</h2>
<p>This week the major US stock exchanges pushed higher. The Nasdaq reached close to 16.000, the peak of July, on bets that the Fed has concluded with rate hikes.</p>
<p>Following the CPI data, expectations for further Fed hikes somehow faded away, therefore market participants postponed the Fed’s first rate cut for June.</p>
<p>A dovish Fed could drag down US Treasury yields and the US Dollar, while stimulating demand for equities, particularly high-growth stocks.</p>
<p>The economic calendar will deliver few macro data; however, it is crucial to monitor the stability of the ongoing bullish trend.</p>
<p>Let’s start on Tuesday 21 November, with CPI in Canada and existing home sales in the United States. On the same day, we will also have a speech from President Lagarde of the ECB. At the closing bell of the US markets, we will have the most important event of the week: the FOMC minutes. Those minutes refer to the meeting in which the Federal Reserve left interest rates unchanged, and the market simultaneously perceived that Federal Reserve Chairman Jerome Powell adopted a more dovish stance. The minutes will shed more light on whether this was the case, particularly given that the week following the meeting, Fed officials seemed to push back on market expectations that the Fed was done with hiking rates. The market expects the Fed to leave interest rates on hold in the December meeting and a rate cut in June next year. The words and the tone of the minutes could change these expectations.</p>
<p>On Wednesday the 22 November will be released the core goods durable orders and initial unemployment claims for the United States.</p>
<p>On Thursday 23 November will be released the PMI for the Eurozone. October’s EU PMI figures showed that both the service and the manufacturing sectors contracted more than expected, raising concerns about a recession in the final quarter of the year. Investors will not only be watching the headline figure but also the sub-sectors, which in October showed a sharp drop in new business orders, the first fall in employment in 2.5 years, and cooling price pressures.</p>
<p>On Friday the 24th, we will have several macro data from Japan. In Germany, we will evaluate the Ifo index and the GDP data. In the United States, we will assess the global services PMI.</p>
<p>The quarterly earnings reports will continue to flow. Retailers such as Target, Macy’s, and Home Depot reported earnings last week, which were mixed results, and US retail sales fell for the first time in seven months as aggressive Fed rate hikes started to hit US consumers. This week, retailers will remain in focus in the US holiday-shortened week ahead of the Black Friday and Cyber Monday shopping events. Lowe’s and Best Buy will report Q3 earnings on November 21st.</p>
<p>Nvidia is due to release Q3 earnings on November 21st. The figures come as the AI stocks’ share price trades 240% higher this year on upbeat earnings and strong guidance. All eyes will be on Nvidia’s AI and data center business; nothing else matters. Revenue is expected to rise by 170% to $16 billion, and EPS is forecasted at $3.34, representing a rise of 475% compared to a year earlier. Earnings come as Nvidia unveiled its highly anticipated H200 processing unit for training AI models and announced a series of io chips for Chinese customers complying with U.S. government export restrictions.</p>
<h2>Weekly analysis and market scenarios for DAX and Dow Jones</h2>
<p>The monthly setup that occurred on October 30th provided a boost to the international stock markets. In less than two weeks, the lunge was around 8%. The real question now is: How will Wall Street react till the end of the year? Currently, everything aligns in accordance with our annual analysis, projecting annual highs within the next three weeks. Furthermore, this year was expected to mark the lowest point level of the entire decade. Please be aware of the annual set up on 30 November.</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>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 that were supposed to be posted in October 2022 will have a high probability of remaining so for many years. They could represent the lows of the entire decade. Despite a certain short-term overbought situation, the markets are unstoppable and will be like this 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&amp;P500 index broke the key resistance level at 4470-4503, confirming the possibility of a strong upward movement in the coming weeks which could lead to new historical highs.</p>
<p>New supports in area 4517-4510 and 4503-4494. Key support in the 4491-4474 area, the breaking of this latter level could lead to deep corrections. Support in the 4428 area,<br />
which becomes weekly.</p>
<p>4411-4409, 4397, 4390-388 and 4371-4384 are confirmed.</p>
<p>4363 is confirmed, the breaking of this important level could lead to swift corrections towards 4334-4327, 4320-4315, 4303-4292 up to 4256, which remains a key support for the ongoing rally. Additional supports in areas 4244-4223, an overbought area, 4190-4185, and 4164-4158.</p>
<p>Late November support at 4138-4124 is the new monthly support. 4117 and 4100 are confirmed. The loss of the latter support could lead to heavy drawdowns 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 for the whole year.</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 breakout of these levels: We could witness a new trend reversal.</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>The break of the 4470-4503 area opened up the getaway to new highs. Above 4525-4538, we will look for the key resistance in the 4557-4564 area.</p>
<p>4575-4580 and the monthly resistance in the 4595-4607 area are confirmed. Resistances 4617-4622 and 4629-4632 were also confirmed.</p>
<p>The upside targets are still 4662 and 4680, where important resistances have a foundation before being able to witness new historical 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? Rises and drawdowns should always be accompanied by monitoring supports and resistances. To continue on the upside move, it’s crucial not to breach the weekly support at 4428 by the end of the month. We’ll see what happens in the next few days.</p>
<p><img decoding="async" fetchpriority="high" class="alignnone wp-image-27160 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DAX-1.png" alt="" width="1916" height="840" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DAX-1.png 1916w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DAX-1-300×132.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DAX-1-1024×449.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DAX-1-768×337.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DAX-1-1536×673.png 1536w" sizes="(max-width: 1916px) 100vw, 1916px" /></p>
<p><strong>DE40 –</strong> Last week the German index posted an extraordinary rise, closing near the mid-September resistance in the 15967 area.</p>
<p>New supports in the 15926-897 area below which we could witness swift downward corrections with targets located at the volumetric support of 15679-620 and 15589-533. Additional supports in 15422-384 area. Weekly support in the 15315-252 area.</p>
<p>15130-097-070 and 15036-15000 confirmed. Monthly support in the 14935-895 area. Additional supports in the 14874-801 and 14775-730 areas. 14662 and 14625-590 are confirmed.</p>
<p>Confirmed intermediate supports at 14138-184, 14342, 14414-545.</p>
<p>Critical area in the 13814-781 zone. 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 are all 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 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 15967 area.</p>
<p>15959-992 and 16024 are confirmed. Above the latter level, new price accelerations are still possible.</p>
<p>16054-104 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 15533, we could witness a chance for a continuation of a bullish movement on a monthly basis; below 15252, the trend will move firmly downwards again.</p>
<p><img decoding="async" class="alignnone wp-image-27163 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DOW-1.png" alt="" width="1916" height="840" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DOW-1.png 1916w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DOW-1-300×132.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DOW-1-1024×449.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DOW-1-768×337.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DOW-1-1536×673.png 1536w" sizes="(max-width: 1916px) 100vw, 1916px" /></p>
<p><strong>US30 –</strong> Last week the American index posted a very strong rise, closing near the key resistance level located in the 35109 area.</p>
<p>New supports in areas 34880, 34833-796, and 34717-630. The loss of these supports could lead to swift corrections with targets at 34383-210 and 34082-33929, which becomes the new weekly support.</p>
<p>33868-811, 33767-598, 33557-457 and 33384-192 is confirmed. Monthly support in area 33133-057. Additional support in area 32896-792.</p>
<p>New monthly support in the 32771-650 area. Critical supports are confirmed in areas 32600-524 and 32393-331.</p>
<p>Confirmed supports placed in two overbought areas: 31197-497 and 31536-764. Additional support areas are placed at 31753-920, 32111, and 32276. 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 in the 34933-35075 area.</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 now an annual 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 expected to move upward smoothly for the next three weeks. If there are no changes in sentiment and positioning, the market will quickly absorb any correction.</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-20th-24th-november-27159/">DAX 40 & DOW JONES: weekly analysis 20th – 24th November</a> appeared first on <a href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>