The Dow Jones futures continued their massive plunge on Friday, as big players Apple, Tesla, Nvidia and Microsoft continued from where they left off on Thursday in premarket trading. The drop in the Dow Jones continues as cases of the coronavirus continue to crop up in new countries all across the world.
Dow Jones futures are currently down by 1.5%, trading at 25495. It was able to bounce off support, helping it to trade off intraday lows of 24894. The Dow Jones is on track to record the worst trading week it has had since the 2008 global financial crisis, as it has ended every single day of the week in losing territory.
With the slump seen this week, the Dow Jones is presently trading at nearly 10% lower for the year.
The question on the minds of many is: when will the Dow Jones find a bottom? This is a difficult question to answer. The overheated market was already overdue for a correction, but no one could have placed a bet that it would be a new disease that would trigger it.
The fact is that the coronavirus outbreak is not even close to being contained. The only signs of a bottoming out of the current correction will probably be seen when there is global containment of the coronavirus epidemic. The emphasis is on the word “global”. From the data available, this is not happening anytime soon.
The Dow Jones has bounced off the support line of 24922 and is heading back up to retest the lowest ray of the pitchfork, located at the 25450 price level. If the price can break this to the upside, then a possible test of 26130 will be on the cards.
However, the sentiment strongly favours the continuation of the selloff. If this is the case, then 24922 may be tested again. A breakdown of this price area targets the 23961 price area, with the 23248 price level (5 February 2018 and 7 January 2019 lows) being a likely target.