Last week, Dow Jones has been in a consolidation period citing many events in the global markets. The commodities markets were too consolidating and were choppy. Last week, a major event in the form of Fiscal cliff has happened and that was thought to cheer the markets.

But, that didn’t happen and some analysts were expecting a down fall in the United States indices as well as the global markets. But, that too didn’t happen and many investors did lose patience. This is the first sign of some many choppy sessions coming through in the next few weeks.

That is making it difficult for these investors to make profits and traders to make money as trades are resulting in losses and hitting stop losses. So, the main important thing to watch out for in this week is to identify a trend and forecast the trend accordingly. If that is known, one can easily make some serious money in the Dow Jones as the index is in make or break way.

If the index crosses these near term hurdles and moves towards 14000, then that would be a long term breakout and a very good one to make some good money. The Federal Reserve will meet on Tuesday to discuss about stimulus program and other things. This is a major event and will be in the line of major events coming through in thus month.

Dennis P. Lockhart, president of the Federal Reserve Bank of Atlanta, said, “I am not prepared to say we are remotely close to substantial improvement on the employment front. I expect that continued aggressive use of balance sheet monetary tools will be appropriate and justified by economic conditions for some time, even if fiscal cliff issues are properly addressed.”

Technical Analysis:

Markets have been choppy in the last week. The first half, they were moving down and the second half, they were rising. This showed no momentum in the markets and that is worrying the investors. The support levels are at 13000 and the next major one is at 12600. Breaking these would do some serious damage to the markets and they will be in a down spiral.

The markets didn’t fall even the Fiscal cliff disappointed and other major economic events were bad. This is showing some good and strong momentum to play on the upside. So, any positive news will make the market move higher.

Forecast:

Markets will look for the near term resistance levels of 13500 and then, 13600 in the near term. If the market finds no difficulty in crossing these, then a up trend is intact and people will be able to spot a good long term trend in the next 3-4 months. As all the global markets are supporting this, markets will most likely move in to positive regions in the latter half of this week.

The main things to watch out for would be the Federal Reserve likely to comment on the stimulus program this week. Most analysts are expecting no change in the stimulus program.

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Category: Finances
Keywords: Dollar, Consolidating, Support