DOW’s initial dive to 23523.16 overnight proved to be temporary and the rebound from there extended without looking back. DOW ended the day up 230.94 pts or 0.96% at 24264.30. That’s a massive 700 pt come back and was the strongest in nearly two months.
23360.29 is proving to be a solid support that help fuel the rebound. Also, the cards of the first battle of US-China trade war are now unveiled. At this stage, they’re words only as no implementation dates were given by neither side. US will have to wait until completion of the period of public input on May 22 before finalizing the section 301 tariff list. And China certainly won’t have any further action before the US starts the next move. So between now and May 22, we should have already seen the worst. Beyond that? Who knows?
For now, a base should be established at 23344.52/23360.29. And the question is how far the rebound would go. 24314.30 resistance should be taken out easily and the first real hurdle is on trend line resistance at around 24900. The next key hurdle is in 25449.15/25800.25 zone. While a breach of the first one could be seen, we don’t anticipate a break of the second.