Publication date: January 30, 2025
Thursday, January 30, and the AEX is at 907 just after the opening. That is 2 points (0.2%) lower than last week's reading.
What happened on the AEX in the past week
On balance, not much changed in price but the week had a turbulent course. Once again, the AEX was dominated by big results in the tech sector, especially heavyweight ASML. On Monday, the AEX experienced a weekly low of 885 due to media coverage of DeepSeek, the Chinese counterpart to Western artificial intelligence bots. DeepSeek does not appear to need the advanced technology to match the level of ChatGPT causing highly valued companies such as Nvidia and ASML to go down hard.
On Wednesday, ASML came back with excellent numbers and reports causing the largest player in the AEX to surge again, taking the AEX to its preliminary high of the week at 910 points. On balance, there was little change last week but a brief ride from 909 to 885 and back again was experienced in the AEX.
What does this mean for sentiment on the AEX?
Sentiment on the AEX remains positive. The index shows enough upward momentum to reach the first price target at 930 in the short term.
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Based on last week, the expectation remains that the AEX will continue to rise to the 930 level. The algorithm expected a correction between 920 and 900. That there was a panic sell-off on Monday and the price sagged to 885 was not anticipated but does not change the view.
From the 930 level, it is most likely that a longer sideways
correction before continuing to rise to 945. The stop loss for the ongoing buy position in the AEX remains at 878 based on the closing price.
Above is the chart of the AEX over the past 4 months. You can see the running signal and the most likely short-term scenario plotted.
What happened on the Nasdaq over the past week?
The Nasdaq futures are currently at 21,650 which is 250 points (1.1%) lower than last week's reading.
Over the past week, the Nasdaq futures have shown the same pattern as the AEX. A correction was also expected for the Nasdaq.
The correction took place but also went deeper than expected in the Nasdaq because of the panic in the tech sector. On Monday, the Nasdaq futures set weekly lows during the day at 20,763 only to rebound about 1,000 points (5%) to the current level. On balance, not a major result for the Nasdaq but a sharp ride down and up during the week.
What is the expectation for the Nasdaq future?
The expectation 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 stop loss remains at 20,900.
Below is the chart of Nasdaq futures over the past 5 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 45,015 points, which is 640 points (1.4%) higher than last week's reading.
The DJIA future is performing very well for the first four weeks of this year. The DJIA future is gaining 5%. The Nasdaq is at plus 1.8% and the AEX is at plus 3%. All nice returns for the first month of this year but the Dow Jones Industrial Index is leading for now.
Over the past week, the DJIA also had to give in on Monday, setting weekly lows at 44,000 points but quickly managed to pick the way up and has reached its stated price target with a high of 45,154 points.
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What is the outlook for the Dow Jones Industrial Average Index?
The expectation is positive with the next price target at 48,000 points but for the very short term, the most likely scenario is a slight correction to 43,500 points.
Below is the chart of the DJIA futures over the past 5 months with the most likely scenario plotted.
Key items on the economic agenda for the week of Feb. 3 through Feb. 7:
The coming week revolves around the release of the important monthly labor figures from the U.S. on Friday at 2:30 pm. This is an important gauge for the Fed regarding its interest rate policy in the US.
Also some attention to the Consumer Price Index in the EU on Monday at 11:00 a.m. and the purchasing managers' Index in the US on Monday at 3:45 p.m.
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