US stocks tumbled yesterday as investors waited for the outcome of the upcoming Georgia runoff election. The Dow Jones, S&P 500, and Nasdaq 100 indices all fell by more than 1%. This weakness has continued in the futures market. At the same time, the fear and greed index has dropped to 52, which is the neutral level. At the same time last month, it was at the extreme greed level of 89.
What happened: US investors are focusing on the rising number of coronavirus cases in the country as the pace of vaccinations lags. The country is vaccinating more than 200,000 people per day, which is substantially lower than the estimates.
What about Georgia: Investors are also looking at Georgia, where the state will hold its runoff election today. The results will start streaming overnight. Most investors hope that Republicans will win at least one seat, which will lead to gridlock. This gridlock will, in turn, prevent Joe Biden’s tax hikes and other policies.
Fear and greed index: The fear and greed index is an important measure that weighs the sentiment in the market. Today, the stock price breadth is in extreme greed while the market momentum and put and call options are in greed. The stock price breadth and market volatility are in the neutral level while safe haven and junk bond demand are in the extreme fear zone.
Dow Jones forecast
The Dow Jones index dropped to a low of $29,897 yesterday. This price was along the ascending blue trend line. It is now trading at $30,223, which is slightly below the 25-day and 15- day exponential moving averages
Therefore, the Dow Jones index will possibly resume the upward trend as bulls aim for the upper side of the ascending channel at $30,677.
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Dow Jones technical chart
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