Dow Jones Shows True Strength Amidst Tech Concerns – Dow Jones Analysis & Prediction

Key Points

• The Dow Jones remains near all-time highs, and the concerns in the tech sector are evident.
• Apple earnings are released today and will impact the Dow Jones. 
• Non-Farm Payrolls Day looms as a busy end to the week is expected. 
• Can the Dow Jones surge past all-time highs?

Market Overview

The Dow Jones currently trades at 40,800, just 1.5% away from its all-time high. Compare this to the other two major indices, the S&P500 and the NASDAQ, whose prices are 2.65% and 6.27%, respectively, away from all-time highs. This makes the Dow Jones technically the stronger of the three main US indices right now and is something to bear in mind for Wall Street traders.

The reason for this is that there are concerns over the tech sector right now, specifically the “magnificent seven.” Not because they are not superhuman companies but because things may have gotten too far. Therefore, a natural pullback from over-extended stock prices makes sense.

Apple Earnings In Focus

The world’s most valuable company, Apple, will release its earnings report for the quarter after the bell today. Apple is in the Dow Jones, unlike most of the “magnificent seven,” so expect the earnings report to elevate the volatility seen in this stock index today.

Focusing on Apple in particular, it won’t be the quarterly revenues that move the goalposts but instead the forward guidance on the expected sales for the new iPhone. It has been rumored that Apple will limit its exciting new artificial intelligence features to those with either the iPhone 15 Proline or the new bunch coming out. This could start an “iPhone supercycle.” This could be positive for the stock and, therefore, the Dow Jones.

Non-Farm Payrolls Looms

Those expecting a quiet end to the week will be mistaken, as it is US Non-Farm Payrolls Day! This occurs on the first Friday of the month and gives the public crucial information on the labor market in the US. The forecast for the Non-Farm Employment Change is 176,000, down from last month’s 206,000. This would show a consistency in the weakening of the labor market and may force the Federal Reserve to cut at least twice this year if this trend continues.

Dow Jones Reversal or Profit Taking?

From a technical perspective, the Dow Jones is clearly in bullish flow for now. Therefore, this market requires patience, i.e., waiting for a key support area and riding the momentum higher.

Support level one comes at the psychological 40,000 mark. This area is a milestone figure and will likely be natural for support, just as it once was resistance. Support level two is the bullish order block at 39,500. From either of these levels, traders are likely to have all-time highs in their sights and maybe further to 41,500. If both of these support areas break, then we could be in for a deeper retracement down to 38,000.