Industrial robots are welding assembly part in US car factory in. Image source: industriesman © 123RF.com
The “Markit” Flash PMI survey is considered to be amongst the most important indicators of the health of the US manufacturing sector, as it provides preliminary data for the observed period.
The Flash PMI indicator was revised lower in October to 51.3, which is still the highest recorded level in the US for the past six months.
US Flash PMI Manufacturing. Image source: TradingEconomics.com
Thus, the US manufacturing sector recorded a minimal improvement towards the upside in September and October.
The recent trend of industry expansion coincided with the rumours that the US and China might reach a breakthrough in the trade negotiations impasse that was prevailing throughout the summer period.
The consensus forecasts project the trend to continue developing positively in November as well, and the findings of the Flash PMI survey are expected to increase to 51.5 from October’s 51.3.
If Friday’s Flash PMI data meets those initial market forecasts, the observed industry expansion is likely to exert a positive impact on the stock market and support the recent gains that were generated last week in the major US indices.
The Dow Jones Industrial Average Index reached 28000 points for the first time ever last Friday before the closing of the week’s trading session.
This price level has significant psychological importance because of the three zeroes at the end. Some market speculators posit that this crucial level is likely to mark a turning point for the index.
Some of them expect to see a rebound in the price and infer that this price level is the most likely cap of the recent bullish trend.
Nevertheless, the observed gains of the DJI index are likely to be substantiated by robust growth in the US manufacturing industry provided that this Friday’s Flash PMI data meets the initial expectations.
Meanwhile, the underlying bullish trend that is currently being established on the DJI’s 1D chart shows no signs of running out of steam.
The price is currently in the process of developing the second impulse wave in a classic 1-5, ABC Elliott Wave Pattern.
DJI 1D Price Chart. Image source: Trendsharks ©, created with TradingView.com
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