Dow Jones
The Dow Jones futures rebound today pointing to a positive start in the cash market after yesterday’s sharp losses. Wall Street suffered the worst fall since March on rising fears about the second wave of infections. Fed’s projections also halted the optimism of a V-Shape recovery.
The economic data continue to paint a dismal financial picture. The United States Initial Jobless Claims came in at 1542K, below the consensus of 1550K on June 5. The Continuing Jobless Claims came in at 20.929M topping the expectations of 20M on May 29.
The U.S. Producer Price Index (PPI) came in at 0.4% beating the estimates of 0.1% in May, the year PPI reading came in at -0.8%, also above the forecasts of -1.2%. The Producer Price Index excluding Food & Energy came in at -0.1% in line with estimates.
Dow Jones Industrial Average yesterday finished 6.90% lower at 25,128, but and as of writing the Dow Jones futures are 1.56% higher at 25,558. The S&P 500 futures are 1.47% higher at 3,054, while Nasdaq futures are 1.37% higher at 9,750.
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Fear and Greed Index Drops to 52
The fear and greed index dropped to 52 yesterday amid the sharp sell-off in global stocks. The index is hovering now slightly into the greedy territory as it retreated from the 62 mark the previous week. The second wave of coronavirus infections increases the fear in the markets, as in that scenario, the recovery will be halted.
The put/call ratio in CBOE is at 0.56, while the CBOE Volatility Index (VIX) or fear index ended yesterday 36.53% higher at 37.64.
Dow Jones Price Analysis
Dow Jones ended yesterday at 25,128 at the 100-day moving average. The three-month rally is threatened today as a break below the 100-day moving average might accelerate the correction down to 24,000. The technical outlook is neutral now, and investors should wait for a clear break below the 100-day SMA for short positions or a credible rebound from that level for a long position.
On the downside, initial support for Dow Jones is at 25,082 the yesterday low. Next strong support for the Dow Jones futures will be met at 24,758 the low from May 26. A break below 24,758 might open the way for a test of 24,248 the 50-day moving average.
On the flipside, first resistance for the Dow Jones Industrial Average stands at 26,294 yesterday’s high. A move above 26,294 might test 26,971 the low from June 10, which will also signal the closing of the gap. If the bids continue then the next obstacle for the Dow Jones is at 27,623 the high from June 8.