If the market momentum from the last quarter is maintained, It seems reasonable to expect the Dow above 20,000 by the end of the first quarter.
There are a number of factors that can impact the Dow’s movement with a positive or negative direction. A few of these are:
- Donald Trump Presidency
- China economic growth and South China Sea expansion
- Heighting tension in Middle East
- Possible European fragmentation
- North Korea nuclear weapon expansion
- Russia and U.S. relations
It should also be kept in mind that there is a very high expectation for the Trump presidency. It will be interesting to see how long the Trump presidency honeymoon with the markets will continue. The market’s perception that things will improve is very powerful but does have a limit in terms of patience.
A typical behavior of the Dow at a thousand number increments (1,000, 2,000 etc.) is to have a number of false attempts at that level before finally making a commitment to trade through and stay above the thousand number increment.
As a trader, I am not so concerned about when the Dow trades above 20,000, but how it sets up price action trading opportunities.
Dan Gramza is President of Gramza Capital Management Inc. and DMG Advisors, LLC. He provides daily market updates from around the globe on subjects ranging from the Nasdaq and currencies to crude oil and grains at dangramza.com.