The Dow Jones racing to new all-time highs on continued index rebalancing flows

[Redator]

There is ongoing profit-taking after very decent earnings for Tech companies, but the Dow Jones is opening strong.

Very extended levels for the Nasdaq that had been making consistent new all-time highs in the past few months is leading to some selling in the Index.

With the Nasdaq to Dow Jones ratio (mentioned in a US Index analysis in July) hanging around 2, there is some mean reversion flows buying the Dow Jones and selling the Nasdaq in the waiting of further geopolitical and rate outlook clarity.

US Indices performance, August 19, 2025 – Source: TradingView

Spot how the Nasdaq opened lower while the Dow is up. This rebalancing is still running.

Read More: The US Dollar (DXY) pauses at 98.00 as markets await clarity – What's next?

A look at the Dow Jones to Nasdaq ratio

Dow Jones vs Nasdaq, August 19, 2025 – Source: TradingView

The pace at which the Nasdaq outperformed the Dow has made some form of acceleration in the past few weeks but now, the ratio has formed a bottom.

Let's see if this turns out to be a bigger trend or just a profit-taking phenomenon.

I invite you to take a look at the piece I wrote on this in early July.

The ratio kept on decreasing since but markets rarely just revert and usually show some form of deceleration before like we are seeing on the chart.

Dow Jones Technical Analysis

Dow Jones Daily Chart

Dow Jones Daily Chart, August 19, 2025 – Source: TradingView

The Dow reached a new all-time high on Friday at 45,283 (on its CFD, actual index at 45,203) before the usual week-end risk flows slowed the buying down.

The Price action is still choppy on the daily timeframe, however attaining a new record at this point could be the start of a renewed uptrend as the balance is tilting upwards

Let's have a closer look to see what are the technicals for potential new all-time highs.

Dow Jones 4H Chart

Dow Jones 4H Chart, August 19, 2025 – Source: TradingView

The ongoing buying is very strong, particularly compared to the strong selling in the Nasdaq (you can access our most recent analysis on the tech-focused index right here)

Some small selling is happening at the 45,200 handle but looking at the present course of action, only a major headline will prevent reaching the most recent ATH today.

The rest will be to see if buyers are strong enough to breach decisively the level or not.

Levels to place on your Dow Charts:

Resistance Levels

Support Levels

Safe Trades!

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