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Nick Goold

Market analysis

Following the rise the week before, the Dow Jones Index became overbought, so last week saw a consolidation. US retail sales were better than forecast, and the lower-than-expected US inflation release was positive for the US equity outlook.

The technical picture is positive, as support held at the 10-moving average on Thursday. Resistance at 34,000 remains, but a break higher to test the highs from August 2022 is likely in the coming weeks.

While the current uptrend is strong, the Dow Jones has risen significantly from the lows in October. This year has seen strong trends reverse quickly, so a break of the 10-day moving average could be a short-term selling opportunity.

Daily NY Dow with 10 day moving average

Resistance:34000, 34300, 35000

Support:33000, 32000, 31725, 31000, 30000

Understanding market sentiment in the US equity market

Understanding market sentiment can help improve a trader's performance regardless of their trading strategy. Market sentiment is the feeling or attitude of traders/investors toward the future of US equities prices. When sentiment is bullish, prices rise and fall when sentiment is bearish.

Reading the current sentiment and when it might change will help you know whether to trend or range trade. Market trends can continue for a long time, so when market sentiment is strongly bullish or bearish, it is best to follow the market. If market sentiment becomes too strong in one direction, there is a chance of a quick reversal, as no one will be left to continue the trend.

It is helpful to read the news, market reports, and blogs to understand market sentiment. Learning how other people view the market will improve your ability to judge whether the current trend will continue or end.