Current trend

The Dow Jones index is correcting in the local trend at around 34769.0. Stock indicators are preparing to continue moving to their highs against the backdrop of upward dynamics in the bond market and in anticipation of the results of the September meeting of the US Federal Reserve on monetary policy.

Friday's report on the US labor market confirmed the forecasts of market participants that officials will leave the interest rate unchanged: in particular, an increase in Nonfarm Payrolls by 187.0 thousand was recorded, which turned out to be better than analysts' forecasts at the level of 170.0 thousand, while the data also indicated a moderate slowdown in the Average Hourly Earnings from 0.4% to 0.2%, as well as a significant increase in the Unemployment Rate from 3.5% to 3.8%. According to the Chicago Mercantile Exchange (CME) FedWatch Tool, there is now a 93.0% chance that the cost of borrowing will remain at 5.25-5.50%. Investors are hoping to hear confirmation of the expected pause in monetary tightening from financial officials speaking this week, including Dallas Federal Reserve Bank Governor Laurie Logan and the President of New York Fed John Williams.

The American bond market, which was actively declining last week, is now showing local growth. Auctions for placement of 3-, 6- and 12-month bills will take place this evening, the rates for which are likely to be higher than the previous 5.340%, 5.350% and 5.060%, since at the moment 3-month bills are traded with a yield of 5.474%, and the 12-month ones are traded at 5.477%.

The growth leaders in the index are Intel Corp. ( 4.18%), Chevron Corp. ( 1.99%), Caterpillar Inc. ( 1.82%).

Among the leaders of the decline are Walgreens Boots Alliance Inc. (-7.43%), The Walt Disney Co. (-2.44%), Coca-Cola Co. (-0.87%).

Support and resistance

On the daily chart, the index quotes continue their corrective dynamics, trading within the global rising channel with the boundaries of 36400.0–34300.0.

Technical indicators have reversed again and are preparing to issue a new buy signal: the fluctuation range of the Alligator EMAs is narrowed almost completely, and the AO histogram is forming new rising bars, approaching the transition level.

Support levels: 34400.0, 33600.0.

Resistance levels: 35100.0, 35700.0.

Trading tips

If the local growth continues, long positions that can be opened if the price overcomes the channel resistance at 35100.0 with a target at 35700.0 and stop-loss at 34700.0 will be relevant. Implementation time: 7 days and more.

If the asset reverses and contiues declining and the price consolidates below the local support level of 34400.0, short positions can be opened with the target at 33600.0. Stop-loss — 34700.0.