Index in focus: Was that a fakeout breakout on the DJIA (US30)?

Astoundingly, the Dow Jones Industrial Average (DJIA, US30) has gone nearly ten months without even a pedestrian 5% pullback...

Uptrend 3

If you’ve been thinking that this year has been a bit too easy for US stock market bulls, you’re definitely onto something.

Astoundingly, the Dow Jones Industrial Average (DJIA, US30) has gone nearly ten months without even a pedestrian 5% pullback! To put this statistic into context, the Dow has historically seen at least a -5% correction every 71 trading days, or roughly every 3.5 months, so on average, we would have expected three such pullbacks since the start of November instead of zero.

So, when the index broke out to fresh record highs above 35,100 earlier this month, index traders thought that we were in for more of the same steady grind higher in the Dow. This week’s price action has thrown a potential spanner in the works for bulls. Despite a record-setting Q2 earnings season in which a staggering 87% of large cap companies beat earnings and revenue estimates, the major indices have rolled over this week and are currently testing support.

Looking at the DJIA specifically, prices have broken back below the 35,100 level to test the 50-day EMA near 34,800 this morning. The critical area to watch moving forward will be the bottom of the 9-month rising channel in the 34,500 zone; a break below that key area could open the door for a long-awaited -5% (or more) pullback, with the next logical levels of support coming in near previous lows at 33,750 or the 200-day EMA all the way down at 32,700:

Source: StoneX, TradingView

Of course, the recent track record and general “buy the dip” zeitgeist points to new highs in the index sooner rather than later, so if the Dow can hold today’s low and rally back above 35,100 next week, we could testing the 36,000 level by September.

How to trade with City Index

Follow these easy steps to start trading with City Index today:

  1. Open a City Index account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.

More from Indices


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.