The Dow Jones futures point to a slightly positive opening in the cash market after yesterday’s losses. Risk appetite took a hit on the chin yesterday as the number of coronavirus cases continues to rise in the U.S.A. Yesterday announced a new record of 60,000 new U.S. coronavirus infections and now the total cases in the country approaching 3 million.
Profit-taking yesterday halted five straight days of gains As the recent global recovery is in danger in case of more restrictive measures even locally. I don’t expect any country lockdown soon as the economic impact will be devastating but local lockdowns would be the new approach in the fight against the virus.
In the corporate front, Apple and Netflix hit fresh all-time highs yesterday morning but retreated before the closing bell on profit-taking. Dow Jones futures are 0.17% higher at 25,814. The S&P 500 futures are 0.23% higher at 3,144, while Nasdaq futures are 0.42% higher at 10,576.
The fear and greed index dropped from the 51 points yesterday over the rising coronavirus fears and now is at 48 and in neutral mode but pointing towards more fear. The fear and greed index after a rise above the 50 mark at the beginning of the week amid optimism for a fast recovery returned yesterday below the 50 mark.
The put/call ratio in CBOE is at 0.35 close to the lower level in the last two years while the CBOE Volatility Index (VIX) or fear index ended yesterday 3.08% higher at 28.80.
Dow Jones Technical Analysis
Dow Jones ended 1.51% lower at 25,890 after the index tested for the second consecutive session the 200-day moving average resistance but rejected emphatically. The short term picture remains positive for the index, and only a settlement below the 50-day moving average can cancel that momentum.
On the downside, first support for Dow Jones index is at 25,866 the low from yesterday’s trading session. Next support for the Dow Jones will be met at 25,473 the low from June 30. A break below 25,473 might challenge the 50-day moving average at 25,194.
On the other hand, initial resistance for the Dow Jones stands at 26,174 the high from yesterday. A move above 26,174 might open the way for a test of 26,243 the 200-day moving average. If the bulls continue then the next supply zone for the Dow Jones is at 27,400 the high from June 10.