The Dow Jones has shifted from September laggard to October outperformer, while a double bottom, 200-day moving average support and bank earnings could fuel further catch-up.
Key takeaways
- The DJIA has started to outperform in October, gaining 1.43% through 9 October and edging ahead of the Nasdaq 100 after lagging sharply in September.
- A “double bottom” above the 200-day moving average strengthens the potential bullish setup, while the RSI breakout points to improving medium-term momentum.
- A break above 52,687 may expose 53,730, while a daily close below 50,540 would invalidate the bullish scenario, exposing 49,720 and 49,086.
The Dow Jones Industrial Average (DJIA) has undergone a shift in performance over the past six weeks, from a laggard to an outperformer among major US benchmark stock indices.
In September 2026, the DJIA recorded a monthly loss of 3.53%, underperforming the S&P 500 (+0.26%) and the high-flying Nasdaq 100 (+4.58%), driven by AI-linked semiconductor stocks, with the PHLX Semiconductor Index surging 11.87% (see Fig 1).
Fig. 1: Monthly performances of major global stock indices for Sep 2026 (Source: MacroMicro). The information presented is historical information, and past performance is not indicative of future performance.
From the start of October 2026 through last Friday, 9 October 2026, the DJIA reversed higher and recorded a gain of 1.43%, slightly outperforming the Nasdaq 100 (+1.25%) by 0.18%, ahead of this week’s Q3 earnings results release of major US banks such as JPMorgan Chase, Goldman Sachs, Citigroup, Wells Fargo and Bank of America, where the Financials sector has the highest weightage of 26.3%1 in the price-weighted DJIA (see Fig. 2).
Fig. 2: Performances of major global stock indices from 1 Oct to 9 Oct 2026(Source: MacroMicro). The information presented is historical information, and past performance is not indicative of future performance.
Potential bullish reversal from a 2-month downtrend
Fig. 3: US Wall Street 30 CFD medium-term trend as of 12 Oct 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.
Several technical elements of the US Wall Street 30 CFD (a proxy for the Dow Jones Industrial Average futures) have begun to show bullish conditions that may signal the end of the two-month downtrend from its current all-time intraday high of 54,780, printed on 5 August 2026 (see Fig. 3).
The recent price action of the US Wall Street 30 staged a second retest just above its key 200-day moving average on 8 October 2026, forming a bullish “Double Bottom” configuration.
It staged a bullish breakout above the 51,593 neckline resistance of the “Double Bottom,” coinciding with the 20-day moving average resistance on 9 October 2026.
The 4-hour RSI momentum indicator has also staged a parallel bullish breakout from its descending resistance after a prior bullish divergence condition at its oversold region, suggesting a potential revival of medium-term bullish momentum.
Watch the 50,540 key medium-term pivotal support on the US Wall Street 30 CFD for a potential further bullish reversal towards the 50-day moving average, which confluences with the 52,687 intermediate resistance (congestion area from 2 September 2026 to 11 September 2026).
A break above 52,687 may trigger a further rally towards the 53,730 medium-term resistance in the first step.
However, a failure to hold and a daily close below 50,540 invalidates the bullish scenario, exposing the next medium-term supports at 49,720 and 49,086.
Footnotes
1https://www.spglobal.com/spdji/en/indices/equity/dow-jones-industrial-average/#overview
This article and its contents are intended for educational purposes only and should not be considered trading advice.
