DJIA futures climb more than 300 points

The U.S stock market is set to open higher today and extend yesterday’s rally. The market turnaround might continue and bring us into a new bullish leg this month. However, the situation could change drastically too depending on the Fed’s stance on the current situation. Hotter-than-expected inflation numbers and stronger U.S job data could become fuel for traders to rise interest rates in the next FOMC meeting.

Traders might want to stay cautious on the long positions as the situation has not turned better yet from the economic data.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA index stage a major bullish reversal yesterday to erase all of the losses incurred last week. The index might continue upward to test the 30,500 – 31,250 area. If the share prices get rejected with strong bearish reactions then traders could prepare for short positions. On the other hand, further bullish pressure could bring the index up to test the daily SMA 50.

McDonald’s Corporation (MCD)

MCD share prices launched upward with strong bullish momentum. The movement was inspired by the DJIA index movement which reversed its losses following worse-than-expected inflation numbers. At the current time, MCD share prices might continue the upward movement to test the daily SMA 200. Traders will monitor the share price reactions near the averages to determine the next direction. If there is major bearish reactions then traders could enter short positions.