Here’s How the Dow Jones Futures Could Retest $30,500

Summary:

The Dow Jones futures could retest the important support at $30,500 in the near term. This price is at the lower side of the channel.

Dow Jones futures are tilting lower ahead of the important US inflation numbers. They are trading at $31,775, which is slightly below yesterday’s high of $31,886. The S&P 500 and Nasdaq 100 futures are also facing lower while the fear and greed index has dropped to 50.

Dow Jones news: The Dow Jones rebounded yesterday, helped by the bond market and buying the dips. The rebound was helped by companies like Apple, Boeing, Intel, Home Depot, and Microsoft.

Today, the index is cooling down as investors wait for the latest US CPI data. A strong reading, coming a few days after the good nonfarm payrolls, will increase the possibility of higher interest rates faster than expected. Therefore, the key concern among traders is whether the impact of high-interest rates will be offset by the upcoming $1.7 trillion stimulus package.

Meanwhile, the fear and greed index has dropped from last week’s high of 61 to the current 50. This is a sign that investors are neither fearful nor greedy about the state of the market.

Dow Jones futures forecast

The four-hour chart shows that the Dow Jones futures are slightly below the upper side of the ascending channel. It is also slightly above the 25-day moving average while the signal and main line of the MACD are slightly above the neutral line.

Therefore, in my view, there is a possibility that the Dow will retest the lower side of the channel at $30,530 in the near term. However, a move above the upper side of the channel will mean that there are still more bulls left to push the price higher.