US30 makes it two in a row, but do we need more evidence?

October 5, 2022
by Joseph Jeffriess, Market Analyst

What a start to the week and month we are seeing so far, traders. So far, buyers have added 5.52% to the US30, taking prices back to levels not seen since last month.

Yes, it is great to see, but should we start thinking bottom? The UN is warning that we could see a global recession, with developing nations possibly seeing the brunt of the hurt. JP Morgan is also advising this might not be a bottom unless we see certain factors met.

What has been driving the selling, Inflation, rising rates, U.S. and global recession fears? Have these factors gone? US-wise, the Fed remains hawkish, and Inflation remains in play. It is not uncommon to see sharp counter rallies in downtrends, and we need to be in tune with the market to either not be sucked in early or spot a potential turn.

Bulls are definitely back in charge in the short-term, but it’s the next reaction lower that could give us some key evidence in if we are going to see a potential turn. A new higher low followed by a break of the last high would be a very good sign that a new short-term trend is starting to form.

If we see a new move back down to or below the last low would be a worry that the current trend could continue lower.

This Friday’s U.S. employment data could also be a factor for the current recovery, and we feel that traders will be paying attention to its release this Friday at 8:30 am EST.

US30 Analysis Video 

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