Daily Dow Jones analysis: a volatile session sees the index decline
Daily Dow Jones analysis: a volatile session sees the index decline
The Dow Jones
Industrial Average recorded good losses during its recent trading on intraday
levels, losing -0.28% during a session characterized by extreme volatility,
resulting in a loss of about -90.50 points, and the index ended trading at
31,819.15, resulting in five consecutive days of losses. The index recovered
after falling -1.07% during last Friday's trading, ending a week that saw the
largest weekly loss since June, -4.43%.
Over the weekend, the
Federal Reserve and the US Treasury Department announced measures to stabilize
the banking system, and depositors at the troubled Silicon Valley bank will
have access to their deposits on Monday.
The Fed also said it
would provide additional funding through a new "Term Bank Financing
Program," which will provide loans of up to one year to depository
institutions, backed by Treasury bills and other assets held by these
institutions.
US authorities also
took over New York-based SBNY Signature Bank, marking the second bank failure
in a matter of days.
Meanwhile, traders are
no longer expecting a 50 basis point rate hike by the Federal Reserve next
week. Instead, current expectations are for a 25 basis point move, with some
not even expecting any increase at all.
Currently, investors
are closely watching the February CPI data, due later in the day, and the PPI
data due on Wednesday. This is to see more clues about the Fed's rate hike
path.
Technically, the index
found some support during its recent trading after relying on the current
support level of 31,727, which gave it some positive momentum that helped it make
that session characterized by this fluctuation between ups and downs, but the
index is still under several negative pressures, the most important of which is
the dominance of the bearish trend in the medium term.
Its trading has been
along a slope line for some time (daily), continuing to trade below the simple
moving average for the previous 50-day period. In addition, we note the
continued presence of negative signals in the relative strength indicators,
despite their reaching areas that are highly saturated with trading operations
sales.
Therefore, we expect
the index to decline during its upcoming trading, especially if it breaks the
support of 31,727, to then target the support level of 30,454.50.
