The 45,000 level is acting as a roadblockGood day to all,
Recent market movements in the DOW and SPY have demonstrated a sharp upward trend without any significant pullbacks. This deviation from typical market behavior suggests the possibility of artificial manipulation rather than organic growth.
One major contributing factor appears to be the Federal Reserve's aggressive rate-cutting policies. By lowering interest rates, the Fed has incentivized borrowing and increased liquidity in the market, creating upward pressure on asset prices. While this move may have been aimed at stimulating economic activity, it has also introduced distortions, pushing equities higher at an unsustainable pace.
This type of rally, driven more by monetary policy than by strong economic fundamentals or corporate performance, increases the risk of a sudden correction. A lack of major pullbacks could indicate overextended positions in the market, as investors chase the momentum fueled by easy money conditions.
In light of this, my strategy is to remain cautious and focus on identifying potential reversal points. With the DOW and SPY showing signs of being overbought, I'll monitor key technical indicators and macroeconomic data for signals of a potential correction or trend reversal.
The Fed’s policy shift highlights the importance of aligning my trades with broader economic factors. This environment underlines the need for discipline in risk management, as artificially driven rallies can be unpredictable and volatile.
PEPPERSTONE:US30 NYSE:DOW
