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Dow Jones Futures Softer – Fear and Greed Index Rebounds to 66

Dow Jones New York Stock Exchange
Dow Jones

Dow Jones futures point to a soft opening after yesterday’s sharp gains as investors squared up for the initial jobless claims data and August producer prices later on the day. The initial jobless claims for the week of September 4, expected at 846K below the previous reading of 881K. The Producer Price index (PPI) for August is expected at -0.3% slightly higher from the previous reading of -0.4%. 

The ECB dominates today’s economic calendar. 

The ECB expected to leave rates unchanged at -0.5% but might sound more dovish, leaving the doors open for 0.10% interest rate cuts in late 2020 or 2021. ECB might announce a fresh stimulus to support the European economy and express confidence in the state of the economic recovery. The interesting part would be any comments from Christine Lagarde around the strength of the euro, and the recent negative inflation figure. 

Coronavirus Vaccine Trials 

After AstraZeneca yesterday announced that pause the coronavirus vaccine trials, today news that scientists are questioning the reliability of Russia’s vaccine clinical trials results might weigh on risky assets. 

Fear and Greed Index Rebounds after the NASDAQ’s Rally 

The fear and greed index jumped higher yesterday to 66 after the strong rally in Wall Street mainly by the big tech stocks such as Apple, Amazon and Tesla. The fear and greed index dropped to 55 from 77 the previous week amid the sell-off in Nasdaq, which almost lost 10% of its value in three trading sessions. 

Dow Jones Analysis    

Dow Jones index ended yesterday 1.60% higher at 27,940 reversing three straight days of loses. Dow Jones is 2.10% lower since the beginning of the year while it is 2.46% lower the last week. The technical picture remains bullish for Dow Jones despite the recent correction. 

Resistance for Dow Jones is at 28,206 the high from yesterday’s trading session. The next hurdle stands at 28,542 the top from September 4. The recent high at 29.222 is the next supply zone.

On the flip side, support for the index should be met at 27,449 the low from September 8. A break of the index below the 50-day moving average at 27,203 might attract more sellers. The next target for bears would be 26,594 the low from August 4. 

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Dow Jones Daily Chart