Dow Jones retreat for the second straight day as investors are taking some profits off the table after a strong rally that drove the index close to record high levels. The correction should not surprise investors as the index was hovering in the overbought area, and the healthy correction is here just to enhance the strong bullish momentum.
Non-Farm Payrolls failed to impress traders, as it showed that 1,371K new jobs created in August below the market expectations of 1,400K. The unemployment rate dropped to 8.4% below the expectations of 9.8%. The U6 Underemployment Rate also surprised positive as it came in at 14.2% below the expectations of 17.3%. The Labor Force Participation Rate also showed improvement at 61.7%.
Microsoft is among the top losers giving up 2.76% at 211.31; Visa is 2.73% lower at 203.49 while Apple also trades 2.26% lower at 118.09 having recovered from heavy losses in the opening up to 7%.
Meanwhile, Nasdaq continues the rebound from the daily lows as I have mentioned in my previous article: Nasdaq 100 In A Perfect Technical Correction, Bulls Ready for Rebound.
Fear and Greed Index Returns to 58
Finally, the correction for the fear and greed index came after the sharp correction in Nasdaq and S&P 500. The fear and greed index gave up over 20 points to land at 56 and return to the greedy territory after a high reading of 77 that hit earlier on the week.
Dow Jones Technical Analysis
Dow Jones index extend loses down to 27,927 making fresh two week lows as the correction continues in an ordinary action without showing any panic selling.
The intraday support for the Dow Jones index is at 27,664 the daily low. Bears would target next to the low from August 20 at 27,513. The trend changer support is at 27,102 the 50-day moving average which if breached would accelerate the correction.
On the contrary, a rebound would meet sellers at 28,539 the daily high. The next hurdle for the Dow Jones index is at 29,200 the top from September 3.
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Dow Jones Daily Chart