The Dow Jones futures are muted in premarket trading after yesterday’s sharp gains. Positive news from the remdesivir clinical trials on the coronavirus treatment boosted sentiment for reopening the economy sooner than previously anticipated. Better Google earnings along with Tesla Facebook and Microsoft sparked the rally yesterday.
The Federal Reserve policy meeting yesterday did not surprise. Monetary policy was on hold with interest rates at 0%-0.25%. Interest rates would remain near-zero until the Fed feels confident that jobs and prices were moving toward their targets.
The USA first quarter GDP contracted by -4.8%. The weekly jobless claims will attract investors to focus today. Jobless claims for the week ending April 25 are due for release in about an hour; the market expects about 3.5 million new filings. The claims surge peaked in the last week of March and the first week of April at about 6.9 million and 6.6 million. The previous week we had 4.4 million jobless claims, as there are some plans of reopening in some States. Now we will approach the 30 million new jobless fillings the last six weeks.
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Dow Jones managed to score four consecutive days of gains after it managed to break above the 50-day moving average. The index has gained over 36% since the March lows marking one of the best months in Dow Jones history. The technical picture is positive for the short term, but the longer-term picture remains bearish as long as the Dow Jones index trades below the 100-day moving average.
On the technical side, first resistance for the Dow Jones index stands at 24,764 the high from yesterday’s trading session. A break above might test 25,062 the high from March 10. The critical resistance for the long term is at 26,197 the 100-day moving average.
On the other hand, minor support is seen at 23,454 the low from yesterday trading session. Next support will be met at 23,671 the 50-day moving average. A break below will cancel the positive momentum, and a move down to 22,921 can’t be ruled out.