Dow Jones Wavers as Fear and Greed Rises and VIX Rises

Summary:

In this Dow Jones analysis, we look at the recent price action and what to expect when the US publishes its GDP and initial jobless claims

The Dow Jones index is in a tight range ahead of a key inflation figure from the United States. The index is trading at $34,323, which is slightly below its all-time high of $35,080. The fear and greed index, on the other hand, has dropped to the fear zone of 35 while the CBOE VIX Index has jumped by more than 4%.

What happened: The Dow Jones futures are wavering ahead of the second reading of US GDP data. The numbers are expected to show that the American economy bounced back by more than 6% in the first quarter because of the stimulus package. The index will also react to the latest US initial jobless claims numbers. Analysts will be looking at whether the number of Americans filing for claims kept falling.

Further, the Dow Jones is falling ahead of the important personal consumption index (PCE) that will come out tomorrow. This is an important number that is used as a proxy for inflation. A higher number means that the Fed could come under pressure to tighten, which is usually a negative factor for the Dow Jones.

Later today, the Dow Jones will react mildly to corporate earnings from companies like Dollar Tree, Dollar General, and Plug Power.

Dow Jones technical forecast

The Dow Jones index has been on an upward trend in the past few months. On the four-hour chart, the pair has formed an ascending channel that is shown in purple. The price is between this channel. It is also slightly above the 25-day and 50-day exponential moving averages (EMA).

The Relative Strength Index (RSI) is at the neutral level of 53. At this stage, the short-term outlook for the index is neutral. The key levels to watch are the all-time high of $35,000 and the lower side of the channel at $33,430.