Dow Jones
Dow Jones Industrial Average (DJIA) is down by 60 points in the futures market as rotation to tech stocks continues. The index is trading at $29,385, which is better than the intraday low of $29,194. At the same time, the closely-watched fear and greed index has moved back to 64, which is a signal that greed is ebbing.
This week, the Dow Jones has been undecided with investors digesting the recent increase of coronavirus cases in the United States and the potential vaccine. It now seems like the fears of the cases is winning, with investors worrying about lockdowns.
Investors are also worried about stimulus after Steve Mnuchin ended the emergency funding program by the Federal Reserve.
Indeed, states like California and New Mexico have already implemented strict lockdown proposals. This is also evident in the fear and greed index, which has dropped from this week’s high of 74.
Earlier today, the Dow Jones dropped to a low of $29,194, which is slightly above the important support – September high – at $29,177. On the four-hour chart, it is approaching the 28-day exponential moving average. However, it also seems to be forming a bearish flag pattern that is shown in black.
Therefore, I predict that the index will resume the downward trend today as bears attempt to move below the support at $29,177. However, a move above the psychological level at $29,500 will invalidate this case because it will send a signal that there are still buyers in the market.
