DAX 40 & DOW JONES: Weekly analysis 25th – 29th September

<h2>Market movers</h2>
<p>Last week, the stock markets posted a steep decline, after the FED left rates unchanged at 5.25%-5.50%, the highest levels in the last 22 years. Powell also warned that rates will stay higher for an extended period and that the planned cuts for 2024 will be smaller than initially expected. Therefore, the markets have swiftly taken the necessary measures, adjusting prices to the new potential macroeconomic environment. The US Treasury Yield has reached 16-year highs.</p>
<p>The coming week will present some macroeconomic data of a certain degree of interest.</p>
<p>The PCE Core, the Federal Reserve’s preferred gauge for inflation, is due to be released on Friday, September 29th. The July PCE gauge posted the smallest back-to-back increase since late 2020, rising 0.2% in July for a second straight month. The subdued inflation figures highlighted the Fed’s progress in taming inflation. Another small monthly increase in core PCE would support the Fed’s decision to keep interest rates on hold.</p>
<p>We will have the German IFO business climate data, GFK consumer confidence data, and German inflation figures on Monday. The data will provide fresh clues into the health of the German economy, the sick man of Europe. The German economy is struggling amid a slowdown in the manufacturing sector, slowing growth in China, a key trading partner, and higher energy costs. Last week, the Bundesbank warned that the German economy is expected to shrink this quarter.</p>
<p>On Tuesday, we will evaluate the intriguing data on consumer confidence in the USA, which is crucial to dig into the erosion of personal savings and the historic surge in the use of credit cards. On Wednesday, we will evaluate the durable goods orders.</p>
<p>On Thursday, inflation figures for Germany and many other European countries will be released. We will evaluate the GDP QoQ data for Q2 in the United States.</p>
<p>Eurozone inflation is due to be released on Friday, September 29th. Recent inflation figures from the region have shown a steady cooling in consumer prices. However, the pace of that cooling has slowed significantly as oil prices have rallied persistently higher across the summer. Meanwhile, core inflation continues to cool. The data comes after the ECB raised interest rates by 25 basis points earlier in the month in what could have been the last hike of the cycle. Cooler inflation data would support the view that the ECB’s hiking cycle has ended.</p>
<h2>Weekly analysis and market scenarios for DAX and Dow Jones</h2>
<p>With the week ending, the fierce bear market has appeared in Wall Street’s halls and could soon overcome all the remaining obstacles between a natural decline and the medium/long-term bearish reversal. At this point, the upcoming week could be crucial.</p>
<p>After Powell’s meeting on Friday, there is a strong possibility of witnessing a further 3-7% decline, particularly as a monthly set-up is set to expire.</p>
<p>Before jumping to hasty conclusions, we should monitor what will happen in the next 15 days, as the decline could end by the first week of October. The point of view that oversees the annual highs, between the end of November and the beginning of December remains intact.</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 millimeter 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>2023, we expect the following pattern to emerge: the low should be posted in January or 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 managed to post a sharp decline, after swiftly abandoning the 4500 area it closed on Friday at the weekly support in the 4370-4355 area.</p>
<p>If there won’t be a significant rebound, prices will keep the target in the 4304 area, with the consequent close of mid-June. This level becomes the new weekly support.</p>
<p>4274-4263 are confirmed. The loss of this level could lead to a further downward acceleration towards 4249 and then to the 4227-4223 area, the whole zone where volumes managed to concentrate for the upward lunge at the end of 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&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 resistances in the 4376-4392 and 4398-4414 area, which becomes the weekly resistance. Above this level, solid bullish pressures are still possible, with intermediate resistance targets in the 4430, 4454, and the 4470-4503 areas. The latter area should be reclaimed to allow a price upward movement.</p>
<p>4510-518 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 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 need to understand whether last week’s downturn will end within the next 15 days or if we will need to prepare for a few more months of uncertainty. Everything is still on the table. The most critical date in September will be the 29th.</p>
<h2><img decoding="async" fetchpriority="high" class="alignnone wp-image-25864 size-full" style="font-size: 16px;" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-2023-09-25T104238.990.png" alt="" width="1916" height="840" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-2023-09-25T104238.990.png 1916w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-2023-09-25T104238.990-300×132.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-2023-09-25T104238.990-1024×449.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-2023-09-25T104238.990-768×337.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-2023-09-25T104238.990-1536×673.png 1536w" sizes="(max-width: 1916px) 100vw, 1916px" /></h2>
<p><strong>DE40</strong> – Last week, the German index posted a long slip after losing the resistance at 15871-923. Afterwards, prices closed at support 15490-439.</p>
<p>15490-439 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 15500-567, 15588-687, and 15757-810 area, which becomes weekly.</p>
<p>15923, 15959-992, and 16024 confirmed that new price accelerations would be possible above the latter.</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 15967, we could witness a chance for a continuation of a bullish movement on a monthly basis; below 15552, the trend will move strongly downwards again.</p>
<p><img decoding="async" class="alignnone wp-image-25867 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-2023-09-25T104259.864-1.png" alt="" width="1916" height="840" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-2023-09-25T104259.864-1.png 1916w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-2023-09-25T104259.864-1-300×132.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-2023-09-25T104259.864-1-1024×449.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-2023-09-25T104259.864-1-768×337.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-2023-09-25T104259.864-1-1536×673.png 1536w" sizes="(max-width: 1916px) 100vw, 1916px" /></p>
<p><strong>US30</strong> – Last week, the index fell sharply, and on Friday, the price levels managed to rest on one of our weekly supports located in the 34000 area.</p>
<p>33931-861 confirmed as weekly levels.</p>
<p>Confirmed 33712-660 as a monthly support and 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 34038-124, 34296-300 and 34368-412 areas. The break of this latter zone could lead to a strong rebound, up to the new weekly resistance located in the 34617-779 area.</p>
<p>Confirmed 34801-833, 34868-913, 34985 and 35020-050.</p>
<p>The 35109 level is confirmed, and a breakout above it could trigger a strong rebound. Additional resistances are at 35166 and in the 35273-378-444 area.<br />
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 is getting closer to breaching important monthly support levels. The surge in volatility has led prices to fall forcefully; consequently, the bearish phase can continue until it reaches lower levels, so it is advisable to follow the key levels and not go against the 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 rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/dax-40-dow-jones-weekly-analysis-25th-29th-september-25896/">DAX 40 & DOW JONES: Weekly analysis 25th – 29th September</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>