In recent days, the financial landscape has witnessed significant movements, particularly in the American stock market. The period from last Tuesday to Friday saw the Dow Jones Industrial Average embark on an impressive rally, culminating in a jump at the start of this week. The index not only closed with a notably bullish candlestick but also managed to surge further on the following day. Over the course of these six consecutive days of gains, the Dow Jones has carved out a cumulative increase of 3.39%, reaching a new historical zenith at 44,903 points. This remarkable performance is underscored by an overall monthly gain of 7.42%, marking the most substantial monthly increase since November 2023, which had also been characterized by an impressive five-month streak of positive closing figures.

Among the three major indices in the United States, two have successfully established new all-time highs. The S&P 500 reached a peak of 6,025.42 points yesterday, setting a new record. However, the Nasdaq 100 has lagged slightly in this upward trajectory, having touched its peak on November 11, with no new highs achieved in the subsequent weeks. Nevertheless, current trends indicate that the Nasdaq 100 is on a short-term upward path, retaining potential to reach new heights in the future.

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The context surrounding these movements is multifaceted, involving both economic policy and underlying data. A focal point of market attention has been recent adjustments to tax policies targeting specific nations. Although these changes are considered somewhat aggressive, they may contribute positively to alleviating pressure related to national debt.

At the end of October this year, the United States faced a staggering national debt totaling approximately $35.95 trillion, a record high that has been growing rapidly month over month. In a bid to manage this debt more efficiently, plans have been disclosed to form specialized departments aimed at improving operational effectiveness. According to insiders, this will likely involve significant staff reductions, a bold move that has incited concerns across financial markets. Should these reforms unfold successfully, there is a distinct possibility that the trajectory of debt accumulation might be altered, potentially benefiting the stock market.

Moreover, recent minutes released from the Federal Reserve's latest meeting have emphasized the importance of aligning policy approaches with prevailing data indicators. They indicated that should inflation trends descend closer to the target rate of 2%, while employment remains near its peak, a gradual shift toward a more neutral monetary policy stance could be deemed appropriate. This suggestion portrays the Federal Reserve as maintaining independence in its policy decisions, resistant to external pressures, and committed to a path of economic easing. For the American stock market, the prospect of interest rate cuts is conducive to reducing the burden of corporate debts and theoretically enhancing stock performance, a sentiment that has precipitated rebounds across the primary indices, with some even establishing new peaks.

From a technical standpoint, an analysis of daily charts indicates that since August 5, the Dow Jones has been operating within a defined regression channel. Throughout this period, it encountered two notable pullback phases but notably did not breach the lower boundary of the channel. The current market price is situated between the upper and mid-lines of this channel, highlighting a short-term upward trend. Forecasts suggest that by the end of this month or the beginning of next, the price will likely test the resistance of the upper boundary to gauge its effectiveness. Evaluating from a longer-term perspective, the Dow Jones has sustained a bull market for over three decades, and historical trends suggest a strong likelihood of continuation in this bullish pattern.

Historically, each instance of the Dow Jones retracing has typically been followed by a recovery or upward rebound. Therefore, in strategizing investments linked to the Dow Jones, investors are encouraged to adopt a bullish mindset to navigate through potential systematic risks more effectively.

Despite these encouraging indicators, it is imperative for investors to remember that all markets harbor risks, necessitating caution and informed decision-making. The views expressed herein represent the analyst's personal opinions and are not intended as direct trading advice. Investors should avoid relying solely on this analysis, complementing it with their own research and judgment.