US stocks are in the green today even as global risks rise. Futures tied to the Dow Jones, S&P 500, and Nasdaq 100 index have risen by more than 0.40%. The three had fallen by more than 2% yesterday while the closely-watched fear and greed index has dipped to almost 40 with market volatility and safe haven-demand rising.
Fear and greed index falling
The stocks are rising even as the number of coronavirus cases in the United States and Europe continue rising. Yesterday, the US confirmed more than 59,000 cases yesterday as the number of hospitalisation soared to the highest level in months. Worse, officials are warning that the worst is yet to happen.
In an interview with CNBC, Scott Gotlieb, a former FDA commissioner said, “I think we’re right now at the cusp of what’s going to be exponential spread in parts of the country.”
Perhaps, there are three primary reasons why the Dow Jones and other indices are rising. First, investors are bracing for corporate earnings from companies like Microsoft, Pfizer, Merck, Eli Lilly, AMD, Raytheon, and Caterpillar, among others. Second, the indices are rising because of the overall weaker US dollar. The dollar index is down by 0.15%, which is a good thing for US stocks. Finally, the Dow Jones is rising as investors attempt to buy the dip.
Elsewhere, in Europe futures tied to the FTSE 100 index have jumped by 0.20% mostly because of the strong performance of HSBC. The bank reported a more than 30% jump in operating income, boosted by the Asian market. It, together with other banks, have started mulling dividend payouts. The FTSE is trading at £5,778. In Germany, DAX index futures are up by 0.20%.
Asia, too, is in the red, with the Nikkei 225, Hang Seng, and KOSPI falling by more than 0.80% even after some strong economic numbers from China. In a report, earlier today, the Chinese statistics office said that its industrial profit rose by more than 10% in September.
Dow Jones technical outlook
The four-hour chart shows that the Dow Jones index has been in a sharp decline. Yesterday, it reached a low of $27,340, which is the lowest level since October 20. The price is also slightly above the ascending trendline that is shown in blue.
This line connects the lowest levels in June, July, and September. This line is also the neckline of the head and shoulders pattern. It is also below the 25-day and 50-day exponential moving averages.
Therefore, a move below the neckline will see the price continue falling as bears aim for the next support at $26800. On the other hand, a move above the resistance at $28,500 will invalidate this trend.
Dow Jones technical chart