Dow Jones finds the most relief after in-line US CPI

This morning saw some particular reactions to the as-expected CPI report.

Initial reactions were going towards most assets benefitting from rate cuts rallying, like US Equities, bonds and gold heading higher.

Since, longer-term bonds are getting sold off due to the pricing of an immediate September rate cut which would put up long-term inflation expectations. 10 (4.315%) to 30 Year yields (4.90%) are at their highs of the session.

Nasdaq and S&P are getting hurt from this, particularly following the Nvidia and AMD announcement to share 15% of their profits from China to the US Government.

Update: Both the S&P 500 and Nasdaq caught strong momentum again after initially being met with profit-taking, with both indices now marking new record highs.

The Dow Jones on the other hand seems to like the inflation report and is seeing the most buying flows in the morning session – let's have a look at the Technicals for the Index.

The picture is fairly mixed, gives profit-taking impressions

Read More: Markets Today: RBA Cuts Rates, UK Labor Market Weakens, US-China Tariff Truce Extended, FTSE 100 Eyes ATH

See how everything rallied at the number release and the consequent rewiring of flows with the US 30Y Bonds getting sold off while the Dow Jones starts to overperform other indices.

Buyers are trying to push higher from the multi day 44,000 to 44,500 consolidation zone.

Daily momentum is tilting higher from neutral levels, however it will take a consequential rally to put the RSI back towards strictly bullish territory.

The 50-Day MA tilting higher is currently acting as support after catching up slowly to the price action from the NFP lows.

Dow buyers are trying to push the index towards the 44,500 mini resistance zone after bouncing on the 50-period MA.

Momentum is strong for the Index as flows are rewiring towards the US 30 from Tech indices.

Failure to break the 44,500 would indicate further consolidation, therefore keep an eye on that level.

Breaking higher would point to a retest of the All-time highs for the Dow.

Levels to watch for the Dow Jones:

Resistance Levels

• Mini resistance 44,500 +/- 15 points
• 44,519 Thursday highs to break
• All-time high resistance zone around 45,000
• Current ATH 45,150

Support Levels

• Lows of consolidation zone 43,820
• Pivot turned Support 43,500 to 43,750
• NFP Lows Mini-Support 43,250
• 43,000 Main Support Zone

Looking closer offers a clearer picture of the 5-day range.

Buyers will have to be careful of imminent overbought levels, a sign of their strength would be ongoing consolidation at the highs or a refusal to retest lower levels.

Watch the effect of rising yields on indices as some rewiring of flows from Nasdaq to the Dow is going on.

Safe Trades!