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DJIA rallies over 1000 points in a strong post Christmas recovery

  • Following a 600 point decline or 2.9%, in a holiday-shortened session on Monday, the Dow Jones Industrial Average spiked with a bullish surge on Wall Street, recovering all of its pre-Christmas Day sell-off which was the worst Christmas Eve sell-off in history on Wall Street in history.

The Dow Jones Industrial Average rallied by more than 1,000 points, climbing by around 1,086 points, or 5%, to end near 22,878. while the S&P 500 SPX, +4.96% advanced around 117 points, or 5%, to close near 2,468. The Nasdaq Composite COMP, +5.84% rose around 361 points, or 5.8%, to finish around 6,554. The energy sector rose more than 6%, with oil companies lifted by a sharp rebound for crude. The best performers in the DJIA were Nike Inc that gained 7.21%, Apple inc that added 7.04% and Visa Inc, adding 6.98%. The worst three were Coca-Cola adding 2.43% McDonald's Corp adding 2.20% and Verizon Communications Inc, adding 2.62%.

On the political front

Markets were roiled ahead f the Chrismas break due to a number of political headlines taking the limelight. Firstly, the US government shutdown weighs on risk and there were rumours that Trump was looking at a way to fire Fed's governor Powell. However, the White House on Wednesday denied a CNN report that Treasury Secretary Steven Mnuchin’s job was in “serious jeopardy”  The White House economic adviser Kevin Hassett was interviewed in televisions and he said that he was confident that President Donald Trump was happy with Mnuchin. The WSJ also reported that Hassett assured that the Federal Reserve Chairman Jerome Powell’s job was “100% safe.”

DJIA levels

  • Support levels: 22379 22248 21648
  • Resistance levels: 22982 23137 23534

As for the technicals, the indicators have shifted to bullish with RSI rising from oversold territory and MACD turning less negative. The price has now pierced the 38.2% Fibo at 22738 and targets a run to the 50% level at 23137.

 

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