Publication date: Jan. 16, 2025
It is Thursday, January 16, and the AEX is 903 at noon. That is 12 points (1.3%) higher than last week's reading.
What happened on the AEX over the past week
Stock markets had to deal with the release of monthly labor figures from the US on Friday last week. The AEX fell Friday and Monday from 897 to its lowest point of the week at 879. On Wednesday, inflation figures came out of the US. In particular, core inflation fell back well, which means the Fed will again see more opportunities to cut interest rates further in the US. On this, the AEX rose to its current high of 903.
What does this mean for sentiment on the AEX?
The sentiment on the AEX is positive. The breakout above 897 indicates the strength of the market, and a close above this level confirms the uptrend toward our first price target, 930.
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Based on last week's close, the AEX's outlook is unchanged. The index has consistently held the important 870 level and is coming back strongly from an intermediate price dip.
As long as the AEX holds the 870 level on a closing price basis, the most likely scenario is a rise to 930-931. This will not happen in a straight line. The algorithm expects an intermediate correction between 910 and 900.
On reaching 930, a clear long-term view can be determined. Currently, the longer-term vision is difficult to determine as there are still too many variables and alternatives.
Here is the chart of the AEX over the past six months. The ongoing signal and the most likely short-term scenario are plotted.
What happened on the Nasdaq this past week?
The Nasdaq futures are currently at 21,500 which is 200 points (0.9%) higher than last week's reading.
Ending last week, of course, the Nasdaq also had to deal with the numbers from the US. The published monthly labor figures were better than expected. This may fuel inflation which may prevent the Fed from cutting interest rates further anytime soon. Nasdaq futures subsequently fell 3%. On Wednesday, sentiment turned back to positive due to the good inflation numbers and the Nasdaq rose over 4% again to its preliminary highest level of the week at 21,567 points.
What is the outlook for Nasdaq futures?
The outlook is unchanged and positive for the short term. The long position taken at 20,440 has held the important level of 20,900 on a closing price basis and has regained its way up. The short-term price target remains at 23,000. The stoploss remains 20,900.
Below is the chart of Nasdaq futures over the past 6 months with the most likely scenario.
What happened on the Dow Jones Industrial Average (DJIA) Index this past week?
The DJIA is currently trading at 43,375 points, which is 475 points (1.1%) higher than last week's reading. Last Friday, the DJIA future dropped almost exactly to the previously indicated support level at 41,800. On Wednesday, the DJIA benefited from good inflation data with a 3.8% rise and set the weekly high for now at 43,565.
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What is the expectation for the Dow Jones Industrial Average Index?
The near-term expectation is positive and expects the algorithmic model to start testing the previous top at 45,000 points. From the current level of about 43,500, we should first expect a modest correction to about 42,800.
The DJIA is setting a longer sideways pattern to continue the uptrend later in 2025. The price target has yet to be determined. Below is the chart of DJIA futures over the past 12 months, with the most likely scenario plotted.
Important items on the economic calendar for the week of Jan. 20 through Jan. 24 :
In the coming week, the U.S. begins Martin Luther King Jr. Day on Monday. The stock markets are then closed in the US. During the week, we do not expect any very important numbers or events. Some attention to the purchasing managers' index in the production and services sectors in the US. These are due Friday at 3:45 p.m. and published.
Disclaimer: Investing involves risk. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts' own insights and experiences and are, therefore, for educational purposes only.