The Dow Jones Industrial Average has retreated from the all-time highs posted yesterday after the markets digested the Initial Jobless Claims numbers for the week. The numbers showed a surprisingly large decline in jobless claims, but economists at Jeffries are expressing caution over the numbers.
Their cautionary note arises from the drop-off in filings of jobless claims, which may have been the risen for the surprising decline in the numbers. The snowstorms and power outages of Texas had been expected to cause claims to rise.
It would appear as if the markets are negatively responding to the numbers, as the Dow Jones Industrial Average is down 0.38% despite the report’s apparently good numbers. Claims came in at 730K, which was less than the 828K that the markets reported, and was also less than last week’s downward revision of 841K.
Despite these numbers, the Dow Jones Industrial Average is down 0.41% as of the time of writing.
Technical Outlook for Dow Jones
The Dow closed with a decent upside penetration above the 31739 resistance. However, this move is being put to the test by today’s decline, which now looks set to retest this price level that now acts as a support. A breakdown of this new support allows for a potential pullback to the 31282 support level, with 30585 and 30358 also serving as initial downside targets.
On the flip side, a bounce on the 31739 support allows the Dow Jones to retest the all-time high at 32024, which now serves as the immediate resistance. A potential resistance is seen at the 32505 price level (100% Fibonacci extension from the 13 May 2020 swing low to the 2 September 2020 swing high). This could be the new target if the bulls can break past the 32024 resistance with a new burst of buying momentum.
Dow Jones Daily Chart