Wednesday, December 5, 2018

DOWJONES - 05 December 2018


Fundamental Highlights

The Dow plunged 800 points to 25027 yesterday as the yield on three-year notes rose above the yield on five-year notes spooking investors as yield-curve inversion is usually seen as an indicator of an upcoming economic slowdown. Today, with the release of most US economic reports postponed due to the national day of mourning, traders are likely to stay on the sidelines. Looking ahead to the rest of the week, traders are likely to keep an eye on reports on private sector employment, the US trade deficit, weekly jobless claims, and service sector activity.

Technical Analysis

The DJIA dropped 800 points yesterday, crossing the key technical support line at 25290 as if non-existent and closing back below the 200-period moving average. The bears were in full control moving the market lower throughout the whole session. The index finally bounced off the 25000 psychological support line which is seen now as the last line of defense below which the next support line is at 24790. Things look different on a daily chart however, as prices still trade above main moving averages. Both the medium and long term trends therefore are still bullish. It is also worth noting that the weekly volatility is slightly above the market's average weekly trading range.

Support: 25000 / 24300
Resistance: 25290 / 25390

Chart (H1)