Is the Dow Jones Index a Buy as Fear and Greed Index Drops to 34?

Summary:

In this Dow Jones index forecast, we look at whether it is a buy or sell as the fear and greed index has dropped to 34 recently

The Dow Jones index is loitering near its all-time high even after the relatively strong bank earnings. The index is trading at $34,933, which is a few points below its all-time high. At the same time, the fear and greed index remains at the fear zone.

Dow Jones news. The biggest catalyst for the DJIA this week is the ongoing earning season. This week so far, we have received results from top companies like Goldman Sachs, JP Morgan, Bank of America, Blackrock, and PepsiCo.

Most of these companies have reported strong quarterly results that beat analysts’ forecasts. Only one big bank, Bank of America, reported falling revenues. But its profit increased as the company shifted some of its last year’s provisions into profits.

Looking ahead, some of the companies that will publish their results today are UnitedHealth Group, Cintas, Morgan Stanley, U.S Bancorp, Progressive, and Bank of New York Mellon.

The Dow Jones is also reacting to the overall dovish statement by Jerome Powell. While US inflation has jumped, the Fed chair said that the bank will maintain its policy. It expects that inflation will normalize as the US reopens.

Meanwhile, the fear and greed index remains in the fear zone. It is currently at 34 with only market momentum and junk bond demand being in the greed zone. Other metrics like put and call options, safe-haven demand, stock price strength and breadth are all in the fear zone.

Dow Jones technical forecast

The daily chart shows that the Dow Jones index has been in a strong bullish trend recently. The index remains between the ascending channel shown in black. It has also risen above the 25-day simple moving average. Notably, the index has formed an inverse head and shoulders pattern.

This is a possible signal that the index will likely keep bouncing back as investors attempt moving above the important resistance at $35,000. On the flip side, a drop below $34,200 will invalidate this trend.