All time high on Dow and S&P - What lies ahead?

The US market has broken out spectacularly during this week after an emphatic buy signal that triggered on Thursday in the prior week. Here is a brief technical picture of the main events during the week.

DJIA Futures - Big green candle last Monday followed by another big green breakout on Tuesday above the previous pivot high to ATH. Small Reverse Hammer on Wednesday followed by a Bearish Engulfing on Thursday. Narrow range Bullish Harami on Friday, a sell failure and a fresh buy signal.

Nasdaq Futures - Big Green candles on Monday and Tuesday that penetrated a wide range and travelled right up to the upper boundary of the range. A pullback on Wednesday followed by a small hammer on Thursday indicating further upside, Confirmed on Friday with a Bullish Engulfing and a fresh buy signal, looks all set to break out of the wide range next week.

S&P Futures - More or less the same technical formation as DJIA. Big green candle last Monday followed by another big green breakout on Tuesday above the previous pivot high to ATH. Small Reverse Hammer on Wednesday followed by a narrow range red candle on Thursday. Bullish Engulfing on Friday, a sell failure and a fresh buy signal.

The powerful move is seemingly driven by a combination of falling rate-hike expectations (probability of a September Fed rate hike dropped from around 67% to 44% following a weak jobs report)+ strong corporate earnings on the back of AI optimism (~ 85% of S&P 500 companies reporting quarterly results beat analyst expectations)+ easing geopolitical/oil risk.

The US indices have spoken, boldly and decisively. A fresh buy signal last Friday is indicative of further upside in the coming week. Let time tell what happens next.

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