American equities are tumbling today as traders react to financial results from leading companies like Apple, Amazon, Facebook, and Alphabet. Dow Jones, S&P 500, and Nasdaq 100 futures are down by more than 2%.
InvestingCube's S&R Levels
Not in Sell Zone
In its results yesterday, Apple reported quarterly revenue of more than $64.7 billion, which was higher than the estimated $63.7 billion. Its iPhone revenue dropped by 20% year-on-year to $26.44 billion. Services revenue rose by 16% while Mac and iPad revenue rose by 28% and 46%, respectively. Apple share price has dropped by more 5% in the aftermarket.
Amazon also released its quarterly earnings yesterday. In the quarter, the company made more than $96.15 billion, which was better than the expected increase of $92.7 billion. It made $12.37 per share, beating the consensus estimate of $7.41. The company reported better retail and cloud computing revenue than what analysts were expecting. Amazon share price is down by 1.78% today.
Other companies that released their earnings are Google and Facebook. Their share prices have jumped after they reported strong advertising revenue.
Elsewhere, in Europe, futures tied to the DAX index and FTSE 100 are down by more than 1.85% in response to these results. The DAX is also reacting to the relatively dovish interest rate decision by the ECB. Later today, it will react to the first estimate of Germany and Eurozone GDP data.
In Asia, the Nikkei 225, Hang Seng, and Shanghai composite index have fallen by close to 2%.
Dow Jones technical outlook
On the daily chart, we see that the Dow Jones has fallen in the past six consecutive days and is now at the lowest level since July. This means that it has fallen by almost 10% since October 12. As I have written in the past few days, the index has formed a head and shoulders pattern, with the neckline being at ~$27,000. The index is also below the 50-day and 100-day exponential moving averages.
Therefore, I expect that the bearish trend will continue falling as bears target the next support at $25,000. Still, in the near term, I expect that the Dow will bounce back after the US concludes its election in November.