March Dow Jones, Is the Trump Rally Over? | RJO Futures

January 20, 2017 2:28AM CST

It’s Inauguration Day! Wall Street and the Banking Sector has enjoyed a very nice rally post-election. Now it’s finally time to see if the stock market rally can continue with Trump policies rolling out over the coming months.

If we look at the March Dow Jones from a technical perspective, we posted an all-time high of 19933 on December 20 th , and have yet to break this level for a run to 20,000. The market has since traded sideways, and more recently broken some good support at 19661. This was a level that we saw as a low on December 30 th . Draw a trend line from November 11 th (two days after election) and we broke this uptrend 3 days ago. This is significant in that the market has been trending up since the election until this break. If you look at this chart, there is no real clear support until around 19200. It’s “a lot of white space” to say the least. The next level of support beneath this is the 100 day moving average, which coincides with a period of consolidation at 18760.

Fundamentally, this rally has been more emotional than anything. Positive economic data has been reported, but it’s the excitement that has everyone piling in. Talk of increased infrastructure spending, defense spending, and deregulation of the financial sector with the rolling back of Dodd-Frank have all been major reasons for this rally. The question is will Trump be able to follow through with his campaign promises. If he waffles on any of these promises, or seriously considers tariffs on Chinese goods we could potentially see a sell-off across the board. Now is a good time to consider hedging your long equities exposure with a variety of strategies across not just the Mini Dow Jones Futures, but also Mini S&P, and Mini Nasdaq Futures as well. Contact me at the trade desk for more details at 312-373-5383.

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