By Dow Jones Forecast: Bulls Target 34,375 Breakout – 08 February 2023
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Keep in mind that the stock market and the economy are 2 different things, so try not to spend too much time making sense of it rallying while the economy itself is testy at best.
If we do break down below the 50-Day EMA, then it’s possible that we could go down to the 200-Day EMA, but it would also be the breaking of a triangle, therefore I think we would probably see even further downward pressure. In that scenario, I could see the market bouncing a bit, only to turn around and attract more selling pressure. This would obviously be very bearish and could send the market plunging. It would probably be a general market selloff, not just this particular index.
Pay close attention to the US dollar, because I can have a major influence on what happens next as well, as Wall Street continues to pay more attention to liquidity than anything else. Speaking of anything else, we are in the midst of earnings season, so that could come into play as well.
On the other hand, if we do break to the upside and clear the 34,375 level, then we could send the market toward the 35,000 level. That’s an area that’s a large, round, psychologically significant figure, and therefore would attract a lot of attention and more likely than not have people looking at a place to take profit. Regardless, I think if we get to that point, we probably continue much higher and continue to rally in the face of the Federal Reserve. Keep in mind that the stock market and the economy are 2 different things, so try not to spend too much time making sense of it rallying while the economy itself is testy at best.
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