Dow Jones
The Dow Jones futures trade sharply lower on Monday morning as fears of second coronavirus wave rattle markets. Investors fear that the rising numbers of coronavirus infections would stop the fast recovery of global markets. California, Oklahoma, Florida, North Carolina, and Texas reported increases in daily new coronavirus infections. The recent correction should not be a surprise as the rebound from March lows was very fast driven, but the excess liquidity poured into markets by the Fed and Treasury. Last Thursday Wall Street suffered the worst losses since March but on Friday managed to recover some of the heavy losses.
Investors focus will turn in retail sales, which will be released tomorrow with estimates at a 7.8% increase in May. Jay Powell will testify before the Congress as his semi-annual monetary policy report.
Dow Jones futures are 2.39% lower at 24,792. The S&P 500 futures are 2.16% lower at 2,958, while Nasdaq futures are 1.43% lower at 9,494.
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The fear and greed index dropped to 49 yesterday amid concerns about a second coronavirus wave. The index is hovering now at three-week lows as it retreated from the 62 mark. The previous close was at 55.
The put/call ratio in CBOE is at 0.55 while the CBOE Volatility Index (VIX) or fear index ended in Friday 2.45% higher at 41.70.
Dow Jones futures are 2.15% lower at 24,850 breaking below the 100-day moving average. Earlier today the futures tested the 50-day moving average at 24.400 but managed to rebound. The rally from March lows will be cancelled if the futures settle today below the 100-day moving average.
On the downside, first support for Dow Jones mini futures is at 24,409 the today’s low. Next strong support for the Dow Jones E-mini futures will be met at 24,326 the 50-day moving average. A break below 24,326 might open the way for a test of 23,521 the low from May 18.
On the other hand, initial resistance for the Dow Jones stands at 25,169 the daily high. A move above 25,169 might test 25,785 the high from June 12. If the bids continue then the next hurdle for the Dow Jones futures is at 26,260 the 200-day moving average.