Dow and Nasdaq 100 hold firm, while Nikkei 225 Rallies

Dow Jones, Nasdaq 100, Nikkei 225: Analysis and Charts

The index continues to consolidate just below the record high, having gained a remarkable 16% in almost seven weeks. So far there is little sign of any pullback materializing, though it would take less than a 4% drop to return to 36,000. Initial support could be found around 36,954, the previous high.

All eyes are now on whether the index can, from its overstretched position, succeed in building a seasonal ‘Santa Rally’.

This index touched its previous record high yesterday, though it shied away from hitting a new milestone. As with the Dow, there is presently no sign of a pullback in the works, so the focus is on whether buyers can succeed in eking out a new record high before the end of the year.

In the short-term, some weakness may target the 16,000 area, where the price consolidated in November before its most recent leg higher.

hanged at its latest meeting, weakening the yen and bolstering Japanese stocks that have dropped back from their November highs over the last month. Recent action has seen the price repeatedly test and then hold above the 50-day simple moving average (SMA). The BoJs decision appears to have given the green light to the index to make some new headway to the upside.

A challenge of the November highs at 33,830 now looks likely. From there the highs of June at 34,015 come into view, with a longer-term outlook supporting a move to fresh multi-decade highs.