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Andreas Zanin
Analysis, Weekly Market Updates | January 15, 2024

DAX 40 & DOW JONES: weekly analysis: 15th – 19th January

Market Movers

The major US stock exchanges, despite a higher-than-expected inflation figure, moved strongly upwards, close to an all-time high level.

Furthermore, the Q4 earnings season has just kicked off, with the banking sector delivering excellent results, but also highlighting some difficulties anticipated for 2024.

Throughout the week, we will have some crucial macroeconomic data, and the quarterly earnings season will continue.

On Monday 15 January, the USA will observe a public holiday to commemorate Martin Luther King. In Europe, industrial production data will be released.

Tuesday, January 16th, will be an important day for Germany, inflation data and the ZEW economic sentiment will be released. Canada will also release inflation data, followed by a speech from Waller, a key member of the Fed.

China’s GDP data, retail sales, and industrial production figures are all due to be released on January 17. Given the ongoing concerns regarding the health of the Chinese economy, these figures are likely to be evaluated carefully. Chinese industrial production and retail sales jumped last month thanks to favorable comparisons. However, retail sales could slow as falling home prices feed consumer insecurity. The data comes after the World Bank lowered the Chinese GDP forecast to 4.5% growth this year, marking a 0.1% downward revision from its June forecast.

Also on Wednesday, UK inflation figures will be released. The inflation rate has been slowly trending lower, cooling to 3.9% in November. The markets will be keen to see whether the downward trajectory will continue. The level is still almost double the Bank of England’s target 2% rate. The market has reined in aggressive BoE rate cut bets for this year, with around 116 basis point cuts priced in for 2024, down considerably from the five lots of 25 basis point cuts previously expected.

The European Union will also release inflation data, with a common expectation for a return to 3%.

In the US the main focus of the investors will be on retail sales data for Wednesday, which are expected to rise 0.3% MoM in line with November’s reading. Continued growth of retail sales could feed the soft landing narrative. Should sales come in much stronger than forecast, they could see the markets rein back fed rate cut bets further. Meanwhile, an unexpected fall in sales could see the market ramp-up dovish Fed bets.

Finally, President Lagarde and other Fed members will deliver some speeches.

On Thursday 18 January, the ECB will publish its minutes providing valuable insights to understand and predict the future decision of President Lagarde and the members of the Board.

In the United States, we will have data related to unemployment claims and the Philly Fed index. It is noteworthy to mention the speech by the key member of the Fed, Bostic.

On Friday 19 January in the US we will have data on existing home sales and the Michigan consumer confidence index while in Europe we will have another speech by President Lagarde.

Morgan Stanley and Goldman Sachs are due to report Q4 earnings on Tuesday, the 16th of January. Following a disappointing initial nine months to 2023, investment banking activities are expected to be in a better place in the year’s final quarter. An improved risk environment in Q 42023 may have supported a revival in dealmaking. Bad loans and NIM will also be in focus.

Finally, the Davos World Economic Forum takes place across the week with leaders from business governments and civil society as well as the global media set to attend. While the event doesn’t tend to be market-moving, it will draw attention to global risks in 2024, which include climate change, technology, geopolitics, and AI misinformation in an election year.

Weekly analysis and market scenarios for DAX and Dow Jones

2024 will be very important for the markets. There are several political elections in different regions of the world, starting from the United States of America to Iran, Mexico, Portugal, the United Kingdom, and about 50 other countries. Furthermore, attention will be focused on the war in Ukraine and Israel as well as the various issues in the Middle Eastern region. The year is expected to be positive for the stock markets with 4-5 months of sideways and bearish movement. Most likely the lows for the year will be posted at the end of the first semester. After that, markets should rise until the end of the year, reaching annual highs in December.

What will happen from now on? We are approaching a crucial period of the year for the stock market. Furthermore, since reaching the lows on 30 October, prices have not yet experienced a retracement of more than 3%. We believe that this event could be imminent and that January could close below its opening levels or even below the lows recorded in December.

From the lows of the week of March 13, the rise of the international stock exchanges has been incredible. The thesis that supported a lead to a very strong climb until August 4th, the annual setup, was confirmed with almost millimeter precision. Everything occurred as we predicted, and between September 2022 and March 2023, all international markets posted their temporary lows (which could also be the ten-year lows).

Beyond the rhetoric of the debt ceiling, the recession, and the banking crisis, only a decisive flip in sentiment could lead to a trend reversal. Earnings of US mega caps have shown off and many other companies are also ramping up the increase in revenue.

The average annual returns on international equities (World Stock Exchanges based on GDP) are around 11%. Current rates in America are more than 5%. With a projection for 10, 15, and 20 years, equity markets always beat bond markets. Therefore, we should be at the starting point of a 10-year bull market.

Rising interest rates won’t directly and inevitably lead to a recession. As long as these hikes are balanced with economic growth, there should be no danger. On the other hand, an exaggerated rate cut could drag down the markets for a long time.

The likely lows that were supposed to be posted in October 2022 will have a high probability of remaining so for many years. They could represent the lows of the entire decade. Despite a certain short-term overbought situation, the markets are unstoppable and will be like this for a long time. Here is why.

We have highlighted several times that stock prices tend to move at least 6/9 months before the economic cycle. For this reason, during the final part of 2022, the markets would have posted a significant bottom between June and October and then taken off again for the long term. The prices marked during the year had discounted the most unfavourable, geopolitical and geo-economic conditions.

During 2024, we expect an annual return of around 10 percent with lows likely to be reached between May and June, while peaks should be reached in December.

As always, we will confirm the annual forecast from time to time.

Last week the S&P500 index attacked the 2024 highs in the 4841 area, without managing to go further and closing in the 4811 area.

Control area 4818-802; closing above or below this latter level could determine new bullish lunges or a weekly corrective phase.

New supports in areas 4789, 4782-4774, and 4768.

The movement occurred on Monday 8th created a new support area: 4762-4743, which will be the new weekly support. Intermediate support in area 4725.

Support area 4707-4700 confirmed. Key supports in the 4680 and 4660 areas. The latter becomes the monthly area.

The 4595-4607 area became the monthly control area, closing below it could lead to a significant corrective movement.

The supports in the 4592-4582 area are confirmed, the loss of this latter zone could lead to swift corrections up to the 4562-4552 support, crucial for the ongoing upward movement.

Additional supports in area 4542-4538 and 4528-4523.

4517-4510 and 4503-4494 confirmed. The support in the 4491-4474 area is critical, and the loss of this latter area could bring steep corrections. The target is the support in the 4428 area, which is confirmed as a monthly level.

Confirmed 4411-4409, 4397, 4390-388 and 4371-4384.

The 4363 level is again confirmed, the breaking of this important level could lead to swift corrections towards 4334-4327, 4320-4315, 4303-4292 up to 4256, which remains a key support for the ongoing rally. Additional supports in areas 4244-4223, an overbought area, 4190-4185, and 4164-4158.

Late November support at 4138-4124 became the new monthly support. 4117 and 4100 are confirmed. Losing the latter support could lead to heavy drawdowns in the medium term.

Confirmed the supports in 3930-3905-3899, 3945-3957-3961, 3979, 3993-4000, and 4032-4043 areas. The 4064-4075 areas remain a crucial support for this year too.

3890-3879 is still a critical area because, in this specific area, buyers managed to concentrate. Additional support in 3864-3857 areas. Another intermediate zone is located in the 3822-3814 area.

Support in the 3808-3798 zone was confirmed, below which prices could start a new downward spiral.

Confirmed supports in 3669, 3680-3689-3701, 3711-3726-3733 areas.

3762 and 3711 are the monthly levels that support the current uptrend, so beware of any breakout of these levels: We could witness a new trend reversal.

The psychological support of 3600 remains crucial. The support at 3644-3651 has halted the fall and is now the monthly support after this solid uptrend. It shouldn’t be reached again, to avoid new and heavy downward movements. Below is the 3607 level. Then again, the 3557-3547, 3538-3524, and 3514-3507 are support levels. The 3485 support is now the annual, critical, and historical level for the S&P500 index. We will monitor whether this last level could stop, at least in the medium term, the bearish direction of the markets. Should we go beyond it, 3200-3300 will be the target, sought after by funds, investors, and traders halfway around the world.

Protecting 4770 will push prices towards new historical highs, the first target is 5000-5100 and then 5300-5500. New resistances in the 4824 area and 4830-4837 are confirmed, which remain weekly.

How to move? In recent days, a corrective phase has unfolded, and it might extend further. As we mentioned, until 6 January, there were no dangers ahead, but from this date onwards a decline of even one or even two months could take place. Throughout the next 15 days, we will keep a very high level of attention.


DE40 – Last week, the index attempted an attack on the intermediate resistance located at 16819-898, but without success creating another lower high on a weekly basis.

The control area is at 16695-623. The positioning of the prices above or below the latter area could determine the weekly direction of the index.

New supports in the 16583, 16544-517 and 16460 area.

Support at 16416-306 confirmed which remains weekly. Only below this latter area, the Dax could begin a serious retracement.

Additional supports in the 16263-223, 16198-163 and 16132 area. These levels are great areas to look for long entries. Below 16132 prices can accelerate strongly downwards, towards the new critical support at 16025-15958.

15918-872 is confirmed, below this level, we could observe swift downward corrections with targets at the key volumetric supports of 15679-620 and 15589-533. Additional support in areas 15422-384 and 15315-252.

15130-097-070 and 15036-15000 confirmed. Monthly support in the 14935-895 area. Other supports in the 14874-801 and 14775-730 area. 14662 and 14625-590 confirmed.

Confirmed intermediate supports 14138-184, 14342, 14414-545.

Critical area in the 13814-781 zone. The loss of the volumetric zone 14069-13974 opens the gateway to the monthly support in the 13621 area.

Solid supports in areas 13692-608, 13550-516, and 13457-410. Supports 13314-333, 13331-410, 13438-467 are confirmed.

Confirmed volumetric supports in areas 12865, 12833-12909, 12978-13038, 13113-178, 13222-280, 13307-357.

Confirmed the supports in area 12808-766. From 12628 to 12766, there are a series of intermediate supports, helpful for long entry from pullbacks. 12566 becomes monthly support.

Additional critical supports are 12407-517 for the concentration of volumes. 12353-275 is the first bullish turning zone. Confirmed support in areas 12223 and 12136.

It was also confirmed support in the 19920-15006 area. This is 11875-11950-12024, which halted the price fall after the US CPI data on the 13 October 2022. Losing it would mean new bearish pressures and a touch of the weekly support in the 11766 area; with extensions to 11650 and 11542 below it. The 11095 mark could be a target in case of a massive sell-off. These levels can be considered annual reversal points.

The Dax has reached our annual target in the 16800-17000 area. New resistances in the 16719, 16752-788 and 16829-893 areas. This initial block of levels must be overcome to provide a new reliable bullish signal on a weekly basis.16927-972 is confirmed as weekly resistance.

If prices stabilize above 16927-972, we will aim for 17100 and then we will target the final extension of 2023 in the 17500 area. There is also the potential for new annual targets in the 18000-18500 area.

If by the following Friday, prices remain above 16525, we could witness a chance for a continuation of a bullish movement on a monthly basis; below 16252, the trend could move firmly downwards again.


US30 – Last week, the American index attempted to break the weekly resistance at 37824-872 but was unsuccessful. Prices closed the week in the 37602 area, maintaining a sideways movement.

The control area is 37684-529. The positioning of prices above or below this latter area could determine the weekly direction of the index.

New supports in areas 37494 and 37467-400.

Both 37378-262 and 37236 areas are the first to be monitored and become weekly. The loss of these areas could lead to heavy sell-offs. Intermediate areas: 37126-034, 36927-850, 36762-657, 36617-494, 36403-342. The latter level becomes monthly. All of these areas are excellent buying opportunities. Only the loss of the weekly support could open up for major corrections.

Confirmed 36094-36300, 36013-35872, 35813, 35717-570, 35459-370 and 35337-237. These are optimal levels to take into consideration for possible long re-entries in the event of a price correction.

Supports in the 35206, 35140, and 35052-34946 areas confirmed.

34880, 34833-796, and 34717-630 confirmed which is the critical volumetric support. The loss of these supports will be due to swift corrections at target 34383-210 and 34082-33929, which becomes the new monthly support.

Confirmed 33868-811, 33767-598, 33557-457 and 33384-192. Monthly support in area 33133-057. Additional supports in area 32896-792.

New monthly support in the 32771-650 area. Critical supports was confirmed in areas 32600-524 and 32393-331.

Confirmed supports are located in two overbought areas: 31197-497 and 31536-764. Additional support areas are placed at 31753-920, 32111, and 32276. The 31861 level still remains a key one.

31036-31125 is still to be considered critical support for the monthly level. It was confirmed 30953-815, 30715-614, 30559-381, 30253-136, and 29696-29906.

The 29485 mark remains a critical one. In addition to the 29619-529 and 29338-29264, the support zones 29159-28876 and 28800-28685 are again kept. These are all excellent supports to look for long entry opportunities from pullbacks. Should they all be pierced to the downside, prices could move toward 28319, 28051, 27765, and 27019 in extension.

At 35620, the gap of Tuesday 2 August will be filled. Final resistance in the 35673-715 area.

Prices reached and broke 37.000 points, posting new historical highs. New annual targets at 40000-42000.

New resistances in the 37717-783 area, the break of the latter level could lead towards 37824-872, which remains the weekly resistance.

IMPORTANT NOTE: The market should post new peaks in volatility, initiating an important corrective phase starting from last week’s closure. It will be crucial to monitor the status of the weekly supports to determine the possibility of a bullish continuation throughout the current month. Prices have not yet provided any clues in this regard, and the breaking of the previous local highs could lead prices to new peaks before a more accurate reversal.

Also, this week, it is wise to note Monday’s openings and Friday’s closings for confirmation or denial of the current trend. Avoid overtrading and watch for volatility imparted by HFTs. Mark any gaps that may also appear during the week, with particular attention to those on Monday.

Enjoy your trading!

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