On Friday, the focus was on PCE data (private consumer spending) from the US, which is considered an important inflation indicator. At 0.2%, the core PCE rate on a monthly basis was slightly below expectations of 0.3%. On an annual basis, the data was in line with expectations. All in all, the PCE data was interpreted positively by the market, as it confirmed hopes and expectations for the Fed to cut interest rates in the second half of the year. Although the Dow Jones remained stable or rose moderately throughout the trading day, the strong price rally only took place in the last hour of trading.<\/p>\n\n\n\n
<\/a>Support zone defended<\/h2>\n\n\n\nThe following daily chart shows that the upward movement in the Dow Jones on Friday was not only the strongest price increase of the current year, but also that the upward volume bar was the largest since December 2023. Buying under such high volume is usually a very positive signal.<\/p>\n\n\n\n![\"Dow](\"https:\/\/www.captrader.com\/wp-content\/uploads\/2024\/06\/word-image-50777-1.png\")
<\/figure>\n\n\n\nDow Jones daily chart<\/p>\n\n\n\n
The lower Bollinger Band was not breached and the support area at around 37,800 points offers additional support. The daily EMA 200 (red) can currently be seen as a \u201cline in the sand\u201d, which is likely to run into the aforementioned support area in the coming days. As long as the EMA 200 holds, the upward trend is likely to continue. Falling below the EMA 200, on the other hand, would significantly cloud the chart picture.<\/p>\n\n\n\n
As can be seen on the weekly chart, the Weekly EMA 20 (purple) was also defended with the rally on Friday, which is another positive signal. The weekly EMA 20 has not been breached since the start of the rally in November.<\/p>\n\n\n\n![\"Dow](\"https:\/\/www.captrader.com\/wp-content\/uploads\/2024\/06\/word-image-50777-2.png\")
<\/figure>\n\n\n\nDow Jones weekly chart<\/p>\n\n\n\n
<\/a>Transport index still treading water<\/h2>\n\n\n\nAn analysis of the Dow Jones should also include a look at the transportation index. According to classic Dow theory, signals must occur in both indices for a trend or bull market to be considered confirmed. However, unlike its big brother, the Dow Jones Industrial Average, the Dow Jones Transportation Average has not yet reached any new highs in the current year. The relationship line (Dow Jones Industrial Average divided by Dow Jones Transportation Average) continues to signal a downward trend.<\/p>\n\n\n\n![\"Dow](\"https:\/\/www.captrader.com\/wp-content\/uploads\/2024\/06\/word-image-50777-3.png\")
<\/figure>\n\n\n\nDow Jones Transportation Index weekly chart<\/p>\n\n\n\n
However, the relative weakness of the transportation index has apparently been of little concern to the broad market over the past 12 months. The other major share indices, more specifically the S&P 500 and the Nasdaq 100, have already reached several annual highs and all-time highs in 2024. In addition, the Russell 2000 is in an upward trend, although it is not yet shining with relative strength. All in all, the bull market is therefore still fully intact. Nevertheless, the transportation index should continue to be monitored closely. Should relative weakness develop again, this could weigh on the broad market. A breakout to new highs, on the other hand, would provide another important confirming bullish signal.<\/p>\n\n\n\n
<\/figure>\n\n\n\nDow Jones daily chart<\/p>\n\n\n\n
The lower Bollinger Band was not breached and the support area at around 37,800 points offers additional support. The daily EMA 200 (red) can currently be seen as a \u201cline in the sand\u201d, which is likely to run into the aforementioned support area in the coming days. As long as the EMA 200 holds, the upward trend is likely to continue. Falling below the EMA 200, on the other hand, would significantly cloud the chart picture.<\/p>\n\n\n\n
As can be seen on the weekly chart, the Weekly EMA 20 (purple) was also defended with the rally on Friday, which is another positive signal. The weekly EMA 20 has not been breached since the start of the rally in November.<\/p>\n\n\n\n Dow Jones weekly chart<\/p>\n\n\n\n An analysis of the Dow Jones should also include a look at the transportation index. According to classic Dow theory, signals must occur in both indices for a trend or bull market to be considered confirmed. However, unlike its big brother, the Dow Jones Industrial Average, the Dow Jones Transportation Average has not yet reached any new highs in the current year. The relationship line (Dow Jones Industrial Average divided by Dow Jones Transportation Average) continues to signal a downward trend.<\/p>\n\n\n\n Dow Jones Transportation Index weekly chart<\/p>\n\n\n\n However, the relative weakness of the transportation index has apparently been of little concern to the broad market over the past 12 months. The other major share indices, more specifically the S&P 500 and the Nasdaq 100, have already reached several annual highs and all-time highs in 2024. In addition, the Russell 2000 is in an upward trend, although it is not yet shining with relative strength. All in all, the bull market is therefore still fully intact. Nevertheless, the transportation index should continue to be monitored closely. Should relative weakness develop again, this could weigh on the broad market. A breakout to new highs, on the other hand, would provide another important confirming bullish signal.<\/p>\n\n\n\n<\/figure>\n\n\n\n<\/a>Transport index still treading water<\/h2>\n\n\n\n
<\/figure>\n\n\n\n