Dow Jones First Monthly Decline in 6 Months – Fear and Greed Falls, VIX Rises
Dow Jones futures are down by almost 1% as investors react to the Biden and Trump debate. The index is trading at $27,166, which is substantially lower than the intramonth high of $29,200. S&P 500 and Nasdaq 100 futures are also down by 0.92% and 1%, respectively.
Dow Jones has been under pressure in September as investors have worried about the lack of new stimulus, the rising geopolitical risks between the US and China, and the upcoming American election. A strong US dollar has also weighed-down on the blue-chip index.
All this, together with the low crude oil prices, have helped push the Dow Jones down by more than 5%. September was also the first time in 6 months that the index has dropped.
Today, the Dow Jones is falling because of the contentious debate between Donald Trump and Joe Biden. In the chaotic debate, the two leaders talked about their economic plans, with Trump praising his leadership before and after the pandemic. He also talked about his tough stance on China, including his tariffs. In his part, Joe Biden talked about his policies, including his plan to increase some taxes.
The Dow Jones is also falling because of gridlock in Washington about a new stimulus package. While deliberations of a $2.2 trillion aid package are ongoing, analysts are concerned that the two sides will not reach a deal.
The fear and greed index has moved back to fear mode while the VIX index has risen by 1.45% to $26.45.
Dow Jones futures technical chart
The weekly chart shows that the Dow Jones has made some gains this week after dropping for the previous four consecutive weeks. The price has moved below the ascending trendline that connects the lowest levels in June, July, and August. Also, the Dow Jones has found some support along the 25-day exponential moving averages.
Therefore, I suspect that the Dow will continue moving lower in the coming few weeks as bears attempt to move below last week’s low of $26612. On the flip side, a move back to the ascending trendline level of $27,800 will invalidate this trend.