Insights 
VT 
The Dow Jones is trading at its highest in nearly six weeks, rising roughly 1.3% since the market opened higher in Asia. This boost follows a trade agreement between the US and China, easing previous market volatility caused by trade war concerns.
Market Sentiment Improvement
The deal has improved market sentiment, following US agreements with countries like Japan, South Korea, India, and the UK. The Dow Jones is experiencing its fourth consecutive week of gains, emerging above the weekly cloud top at 42096, with the daily chart testing the converged 100/200DMA’s at 42356.
Despite potential hesitation from bulls due to fading momentum, the strong positive sentiment is expected to keep the upward trend intact. Dips in the Dow Jones are likely to be viewed as opportunities for further gains rather than corrections.
Support is noted at 41797, with session lows at 41600, protecting further levels at 41257 (55DMA) and 41141 (10DMA). Resistance is seen at 42356, 42570, 42834, and 43050.
While the Dow has edged upwards for several weeks now, making a fresh approach above the cloud top and now grappling with dual moving averages near 42,356, it’s the firmness of sentiment following the US-China understanding that’s underlined this trend. The sequence of pacts with other nations prior to this was already setting the tone, but this latest move has settled nerves on both sides of the Pacific. This matters because large-cap equities tend to show consistent strength when external trade pressures ease – export-sensitive sectors in particular gain relief.
Momentum and Short Term Moves
We’re not seeing runaway enthusiasm though; momentum, although positive, is softening a touch. This suggests price action may run into moderate friction when pushing into higher resistance levels – likely around 42,570 and again above 42,800. Those zones aren’t impenetrable, but they’ll probably attract selling pressure at first glance. The daily highs may briefly outpace these marks, but unless flows shift decisively, bulls may hesitate to flood in.
In terms of shorter-term moves, any slide toward 41,600 or even sub-41,300 would sit within the context of a broad upward channel as long as support at 41,141 holds firm. Below that, the 55-day average at 41,257 would come into view quickly – and that line hasn’t been tested properly since early May. This is where we’d reassess load-up levels. Until then, pullbacks closer to 41,800 appear to offer relatively balanced entry points for retracement trades.
Volume participation through late sessions has been choppy but not weak, suggesting that conviction hasn’t collapsed – it’s just waiting for a stronger catalyst. We shouldn’t overlook the impact of quarter-end positioning in the days ahead, either. If institutional positioning re-aligns with the broader bullish structure, especially above that convergence of the 100 and 200-day, 43,050 becomes less of a ceiling and more of a checkpoint.
For those managing delta exposure, this emerging consolidation above cloud support should influence how spreads are structured through next expiry. Biasing gamma-loads to the upside, while setting soft stops below 41,257, may be preferable as hedging costs have come down following the volatility drop. Premiums at the wings remain relatively compressed, so skew analysis continues to offer insight into where deeper floors might be set.
The wider point is that market response to fundamentals has become more directional again – and that’s pivotal for how we rebalance risk across layered options books. As new data emerges from Asia and patterns from the US remain supportive, reversals seem unlikely in the near term – unless there’s a macro jolt to dislodge current pricing comfort. Until then, trades above support floors deserve room to breathe.
