DAX 40 & DOW JONES: weekly analysis 27th November – 01st December

<h2>Market Movers</h2>
<p>The main US stock indexes carry on their upward ride this week as well, albeit to a lesser extent due to the Thanksgiving holiday break. The Nasdaq rose above 16000 to a new 2023 high, boosted by Microsoft and Nvidia hitting record highs.</p>
<p>In the minutes of the last Fed meeting, there was no indication of possible interest rate cuts. The market still anticipates the Fed’s next move to be a rate cut.</p>
<p>A more accommodative Fed could drag down Treasury yields and the USD, while stimulating demand for high-growth stocks.</p>
<p>While the market is increasingly confident that a hard landing for the US economy will be avoided, data shows that a US recession is still a solid probability.</p>
<p>The economic calendar will deliver critical macro data for the global markets.</p>
<p>Let’s start on Monday, 27 November, with a speech by the President of the ECB, Mdme Lagarde, followed by two critical data releases from the US real estate market: building permits and new home sales.</p>
<p>On Tuesday, 28 November, will be the turn of the consumer confidence report in the USA. President Lagarde will deliver another speech.</p>
<p>On Wednesday, 29 November, the RBNZ will announce its interest rate decision. In Germany, inflation data will be released while in the United States, we will evaluate the GDP figure.</p>
<p>On Thursday, 30 November, China will release the PMI index. Meanwhile, Germany will release data on retail sales and unemployment. Additionally, Eurozone inflation data is due to be released on the same day. Consumer prices cooled to the lowest level in two years in October, easing to 2.9% YoY, and down from 4.3% in September. The markets will be monitoring closely to see whether the trend continues. With inflation decreasing and growth slowing, the market is pricing in a rate cut in Q2 next year. ECB president Christine Lagarde said that it’s too early to declare victory in the fight against inflation. Cooling inflation data will support the view that the ECB is at the end of its rate-hiking cycle.</p>
<p>On the other side of the pond the same day, we will assess the PCE core, the Federal Reserve’s preferred gauge for inflation. Core CPE has been steadily easing lower, falling to 3.7% YoY in September. Given that CPI cooled by more than expected in the previous month, investors will be monitoring to see if a similar trend appears in the core PCE figures. Personal spending is also proving to be resilient, rising 0.7% in September. Cooling inflation and resilient consumer spending could add to evidence that the US economy is heading for a soft landing. On the same day, will be important to evaluate the US pending home sales.</p>
<p>The OPEC+ cartel is now set to meet on November 30th after pushing back the meeting from November 25th-26th. The delay has raised concerns over how much further OPEC+ is willing to cut oil production. With oil prices hitting a four-month low earlier in November, big players such as Saudi Arabia and Russia may be keen to extend the supply cuts. They have already stated that they will continue voluntary cuts until the end of this year.</p>
<p>Again on Thursday 30 November, we will assess the release of both Canadian GDP figures as well as the manufacturing PMI and labour market data. Expectations are for growth to remain stagnant in September and the manufacturing sector to remain in contraction. Meanwhile, the labour market in Canada is starting to show signs of weakness after the unemployment rate jumped last month to a 21-month high of 5.7%. The BoC governor, Tiff Macklem, recently said that interest rates may now be restrictive enough. Expectations are growing that the BoC could start cutting rates in the Spring.</p>
<p>On Friday, 1 December, we will monitor the S&amp;P Global US Manufacturing, the ISM index, and assess the remarks by the president of the FED, Jerome Powell.</p>
<p>Throughout this week it will be crucial to monitor the US Treasury auctions.</p>
<p>The quarterly earnings reports will continue to flow as usual. Salesforce will report earnings after the close of the markets on Thursday when the firm is expected to beat the earnings forecast as it has for the past four quarters. Expectations are for EPS of $2.06 on a whole revenue of $8.72 billion. Investors will be monitoring for any updates on Salesforce’s integration of Slack following its acquisition.</p>
<h2>Weekly analysis and market scenarios for DAX and Dow Jones</h2>
<p>The US markets continue to show off strength, and despite being in close proximity to the trend lines that trace the capitulation fall from the highs of July and August. There are negative divergences in place suggesting a drawdown. However, it is important to note that a true decline never begins with a divergence but with a price reversal. Currently, Wall Street is not showing signs of capitulation.</p>
<p>Everything will depend on whatever occurs during the annual setup of the 30 November. Reaching new peaks could mark the current year’s highs, while a relevant low would be seen as an excellent pivot point. November 30th is critical for monitoring the medium and long term trends. If the prices maintain key levels, the upward momentum will face no obstacles.</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 touched the highs again, reaching the intermediate resistance at 4575-4580.</p>
<p>New supports in the 4565-4557 area, the loss of which could lead to swift price corrections.</p>
<p>Additional supports in area 4542-4538 and 4528-4523.</p>
<p>4517-4510 and 4503-4494 are confirmed. Key support in the 4491-4474 area, the breaking of this latter level could lead to deep corrections. Support in the 4428 area, 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>4575-4580 and the monthly resistance in the 4595-4607 area is confirmed. Resistances 4617-4622 and 4629-4632 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? We are at a crossroads that will determine the direction of the market till the end of the year. To sustain the upward lunge, we must not breach the weekly support at 4428 by the end of the month. We’ll see what happens.</p>
<p><img decoding="async" fetchpriority="high" class="alignnone wp-image-27306 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DAX-2.png" alt="" width="1916" height="840" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DAX-2.png 1916w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DAX-2-300×132.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DAX-2-1024×449.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DAX-2-768×337.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DAX-2-1536×673.png 1536w" sizes="(max-width: 1916px) 100vw, 1916px" /></p>
<p><strong>DE40</strong> – Last week, the index went under further consolidation on upward prices reaching 16024, an area from which prices could begin new strong accelerations.</p>
<p>New supports in the critical area of 16040-15986. Holding this area will determine the direction of the German index for the following weeks.</p>
<p>Additional supports in the 15957 and 15918-872 area, below which we could witness swift downward corrections with targets at the volumetric supports of 15679-620 and 15589-533. The aforementioned latter levels constitute the new weekly supports. Other supports in area 15422-384 and 15315-252.</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 again 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 is 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 the 13 October 2022. 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 16054 area.</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 15825, 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 size-full wp-image-27309" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DOW-2.png" alt="" width="1916" height="840" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DOW-2.png 1916w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DOW-2-300×132.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DOW-2-1024×449.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DOW-2-768×337.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/DOW-2-1536×673.png 1536w" sizes="(max-width: 1916px) 100vw, 1916px" /></p>
<p><strong>US30</strong> – Last week the index posted a further peak, closing near the key resistance located in the 35273-378-444 area.</p>
<p>35273-378-444 is the new control zone. A close above or below this level at the end of the week could provide important indications regarding the sustainability of the ongoing rise.</p>
<p>New supports in area 35235-140 and 35052-34946.</p>
<p>34880, 34833-796 and 34717-630 are confirmed, which becomes the new weekly support. The loss of these supports could lead to swift corrections with targets at 34383-210 and 34082-33929, which becomes the new monthly support.</p>
<p>Confirmed 33868-811, 33767-598, 33557-457 and 33384-192. Monthly support in area 33133-057. Additional support in the 32896-792 mark.</p>
<p>New monthly support in the 32771-650 area. Key supports are confirmed in areas 32600-524 and also 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>35273-378-444 and 35539-591 confirmed. At 35620, the gap of Tuesday 2 August 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 annual target.</p>
<p>A monthly positioning of prices above 35599-963 would offer a new bullish direction on an annual basis; a movement that will cross 36529 and maintain this level would offer the possibility of seeing the 37000 area if prices forcefully break the last resistance located in the 36786 area. Above 36236 we maintain the possibility of further volumetric upward pressures.</p>
<p><strong>IMPORTANT NOTE:</strong> The market is expected to move upward smoothly for the next two 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-27th-november-01st-december-27305/">DAX 40 & DOW JONES: weekly analysis 27th November – 01st December</a> appeared first on <a href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>