Publication date: December 19, 2024
Course of the AEX Index
It is Thursday, December 19, and the AEX is at 880 in the opening session. That is 14 points (1.55%) lower than last week's reading. The AEX was waiting for the US interest rate decision on Wednesday evening. On Monday and Tuesday, the AEX fell exactly to the reported expectation at 888. On Wednesday, the AEX ran up to the 894 level but on Wednesday evening, a lot of wind was taken out of the sails from the U.S. and the AEX dropped back to the current 880.
What does this mean for sentiment on the AEX?
Sentiment on the AEX has changed from positive to uncertain for the short term. For the longer term, our sentiment gauge has changed from uncertain to promising-positive.
Chart AEX Index
Below is the chart of the AEX over the past 6 months. You can see the signals and the most likely scenario for the short-term plotted.
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What is the forecast for the AEX?
The AEX has shown a nice setup for a buy position in recent weeks. It was taken on Tuesday at the 889 level. The stoploss was issued at 869 and the price target at 935.
This changed somewhat on Wednesday night. On that evening, in addition to the expected rate cut of 0.25%, the Fed also announced a reduction in the number of rate cuts in the coming year. This announcement was especially a setback for US stock markets. These lost about 4% in a few hours. The AEX also gets a piece of that and lost 1.5%.
This price movement makes the prelude to the ride to 935 a bit more uncertain and gives our algorithmic model a new price target of 897. The 870 remains the rock-hard lower boundary where this, expectedly, temporary dip in the AEX should stop.
The expectation is thus that the AEX will rise to 897 but will suffer from the situation in the U.S. over the next week and may therefore move somewhat precariously with 870 as a lower boundary.
Look back: read our view of the AEX of December 11, 2024, here
What happened on the Nasdaq this past week?
The Nasdaq futures are currently at 21,560 which is 60 points (0.25%) higher than last week's reading.
The Nasdaq futures moved nicely upward at the beginning of the week with Tuesday's high at 22,425 points. On Wednesday night, the Nasdaq took a hit of 5%. This was due to the announced pause in interest rate cuts by the Fed. The Nasdaqfuture set its preliminary weekly low that evening at 21,325.
What is the forecast for the Nasdaq future?
The expectation is positive but the probability has decreased in value so we need to be extra vigilant on the price development in the coming week.
The long position taken at 20,440 has an amended price target and has been lowered from 23,500 to 23,000 for the short term. The stop loss has been increased from 20,350 to 20,400.
For the coming week, the Nasdaq is still expected to suffer from the announced interest rate policy in the US. As a result, the market may correct slightly further to around 21,000 points.
Below is the chart of the 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 42,930 points, which is 1,470 points (3.3%) lower than last week's reading. The DJIA future shows a weaker picture and has been falling all week. Today the index is recovering from Wednesday night's sharp decline. The DJIA Future set Monday's weekly high at 43,980 and Wednesday night's weekly low at 42,190. The DJIA dropped about 3.5% after the Fed meeting.
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What is the outlook for the Dow Jones Industrial Average Index?
The near-term outlook is uncertain. The DJIA is showing a weakening pattern and as a result, may fall further back to the 40,400 level. From there, the most likely scenario is for the DJIA to recover to the current top of 45,000.
Below is the chart of the DJIA futures over the past 6 months with the most likely scenario plotted modified.
Important items on the economic calendar for the week of Dec. 23 through Dec. 27:
The coming week is a special trading week because of Christmas. This means that the major stock markets will be open for half a day on Tuesday and everything will be closed on Wednesday. On Thursday, U.S. stock markets are open and the main EU stock markets are closed.
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. They are therefore for educational purposes only.