The U.S. stock market is moving upwards on Monday after China announced new tariff cuts to U.S. products.
Dow Jones scale 74.2 points or 0.26%, reaching 28,570.8 points, while S&P 500 scales 8 points or 0.25% climbing at 3,232.4 points NASDAQ advances 24.6 points or 0.28% reaching 8,715.3 points.
The Chinese government has announced this Sunday that it will be carried out the tariff cuts, starting from January 1st, 2020. The decision will impact over approximately 850 products coming from the United States. Furthermore, the second world's largest economy seeks to boost imports in the context of deceleration and trade conflict with the U.S.
The stock market continues moving upwards, reaching new record highs. The bullish sentiment is stimulated by the apparent decrease in geopolitical risks, a FED's dovish speech, and the positive macroeconomic data.
This market push is further stimulated by the traditional Santa Claus Rally, which is usually created by the euphoria result of the Christmas festivities on the last five trading days of the year and the first two days after the new year.
Technical Overview
Dow Jones, in its daily chart, continues to move bullish from the rally that began on October 3rd, when the index found buyers at the 25,744 points.
In the 4 hour chart, we observe that the price is found moving within a bullish sequence on a wave ((v)) labeled in black. The upward move began on December 3rd when Dow found buyers at 27,326 points.
On the other hand, we identify the price action moving within five waves sequence within an ascending channel.
According to the canalization technique developed by the Elliott Wave Theory, the channel built by the connection between waves two, four, and three, would bring us the target the potential target of wave five.
Based on this concept, the wave ((v)) in progress could be incomplete due to the price still does not exceed the upper line of the ascending channel. On the other hand, the invalidation level at 27,149 points continues being intact.
In consequence, Dow Jones could reach fresh record highs in the coming sessions.
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