Dow Jones Futures Extend Gains On Fast Recovery Hopes

The Dow Jones futures extend gains for sixth consecutive trading days as New York is reopening today, and optimism for a fast recovery strengthens after Friday’s robust employment data. The U.S. unemployment rate in May dropped to 13.3% while the forecast was looking for an increase to 20%. The U.S. Nonfarm Payrolls increase by 2,5 million in May, beating the estimates of -8 million jobs loss.

Dow Jones Industrial Average finished 3.15% higher at 27,110 on Friday and now is only 5% lower since the beginning of 2020. 

The Dow Jones futures are 0.64% higher at 27,245, S&P 500 futures are 0.43% higher at 3,200, while Nasdaq futures are 0.08% higher at 9,815. 

Stocks to Watch

On Friday, Boeing ended 11.43% higher at 205.43, Apple was 2.85% higher at 2.85% Nike ended 1.41% higher at 102.71, Travelers was 5.39% higher at 124.36, Goldman Sachs ended 1.44% higher at 217.71, and JPMorgan Chase +4.50% higher at 111.23.   

Fed’s June Meeting: What to expect

Traders will be focus on Wednesday on the Federal Reserve’s statement on interest rates and a scheduled press conference from Fed Chairman Jerome Powell. The Fed expected to reiterate its commitment to unlimited asset purchases to keep the liquidity in markets while the negative rates scenario has removed from the table. 

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Fear and Greed Index Jumps to 66

The fear and greed index continue deeper in the greedy territory as it moved from 52 the previous week to 66 this week as the optimism for a fast recovery gains momentum. The businesses reopening and better employment data boosted investors sentiment.  

The put/call ratio in CBOE is at 0.66 implied that investors had shifted their attention mostly on call options. The CBOE Volatility Index (VIX) or fear index ended on Friday 0.71% lower at 25.10.  

Dow Jones Price Analysis

Dow Jones futures are 0.64% higher at 27,245 as the rally from March lows accelerates above the 200-day moving average. The technical picture is bullish, but the index has now moved to the overbought area, and a sharp correction can’t be ruled out. 

On the upside, immediate resistance for the Dow Jones futures stands at 27,297 the daily top. A move above 27,297 might test 27,563 the high from February 26. If the bids continue then the next hurdle for the Dow Jones futures is at 28,249 the top from February 25.   

On the flip side, first support for Dow Jones futures is at 27,031 the daily low. Next strong support for the Dow Jones futures will be met at 26,258 the 200-day moving average. A break below 26,258 might open the way for a test of 25,115 the 100-day moving average.      

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