January 3rd Recap and 4th Predictions
What to Expect in this Analysis
With the first trading day of January completed, let us see how the day played out and what to expect tomorrow.
As we will always do, the first thing to be reviewed will be Top Half of the Daily chart. We will see how the horizontal Support and Resistance Lines from our January Monthly Prediction played out during the first day, as well as review the Moving Averages that came into play.
From there, we will look at the Bottom Half of the Daily chart to see what the momentum looks like going into tomorrow with the additional MACD and RSI indicators.
Overall, what we expected seemed to have played out as we will see below
Top Half Analysis
With the last two trading days of 2021 being negative - as you can see from the 2 red candles before today - there was a lot of fear coming into the morning. However, based on our January Monthly Prediction, we at least had more optimism than most.
Above you can see how the white horizontal supports from the January Monthly Prediction really came into play today - specifically the top white support at $36,338.30
We were happy to see a bounce up from the $36,338.30 line and really overtake the losses from the previous two days. As a result, we needed to create 2 new Support and Resistance lines - both in Yellow - to help estimate the next trading days.
It does seem the 8 Moving Average was able to help with getting over the $36,338.30 line. It will be clearer when we review the hourly chart below; however, even above you can see the lowest trades of the day were around the 8 Moving Average just before jumping up and onward. Great to see the bounce up from the 8 Moving Average, and as long as our candles are over that line, we are happy.
Overall, the Top Half technical analysis of the Dow Jones has been positive. Let us see if this carries over to the Bottom Half technical analysis as we look at the momentum indicators.
Bottom Half Analysis
Starting with the MACD, it is comforting to see the Green line so far above the Red line; the same trend we saw during the January Monthly Prediction
What is even better is that the peak of the green line may be starting to bend in an upward direction. It would be ideal to see more of a decline in the red line; however, the green line going up and the red line staying steady is positive indeed.
Keeping the positivity, it seems the RSI is actually doing the same thing as the MACD. There is a clear upward bend in the green line and red line seems to be staying flat or even declining a bit. None the less, when both momentum indicators are showing the same trend, there is nothing but positivity to be felt.
Hourly Analysis
With a solid view of the daily chart, let us look at each of the day’s trading hours between 9:30 a.m. to 4 p.m. ET, or the 7 candles above.
The first hour seemed to show the most uncertainty, with the top and bottom wick of the candles pretty extreme in length. Though the hour started below our $36,338.30 line, it was reassuring to see the line overtaken by the time the first hourly candle completed.
The next three hours never came below the top of the first hourly candle - a very bullish sign. Though there were moments of uncertainty, again with the pretty extreme lengths of the wicks, the final three hours crushed the day.
Final Thoughts and Targets
Overall, there was a lot of positive in the daily and hourly charts for the Dow Jones.
Based on the positivity from the Top and Bottom Half Analyses, we should continue to see an uptrend tomorrow.
Ideally we finish above our new Yellow Support line or at least above half of today’s candle; as illustrated in the white box above
Good luck trading!