Wednesday, October 17, 2018

DOWJONES - 18 October 2018


Fundamental Highlights

After recovering from an early move to the downside, US equities showed a lack of direction over the course of afternoon trading on Wednesday. The major averages spent the afternoon bouncing back and forth across the unchanged line with the DOW falling 92 points to 25,706. The weakness in the afternoon came as the Federal Reserve released the minutes of its September monetary policy meeting, which showed the central bank continues to favor a "gradual approach" to raising interest rates. Profit taking contributed as well to this weakness on Wall Street, as traders cashed in on yesterday's gains amid lingering uncertainty about the near-term outlook for the markets. Looking ahead, trading on Thursday may be impacted by reaction to reports on weekly jobless claims, Philadelphia-area manufacturing activity and leading economic indicators.

Technical Analysis

Closing within the previous day's range, the DOW failed to decisively move beyond the prior day's trading range. Prices are trading close to the key technical resistance level at 25640 (R1), which is also where the 200-period moving average might be on the hourly chart. Though the stock index is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish. Also note that the longer-term, monthly volatility is currently notably higher than usual for DJIA.

Support: 25200 25000
Resistance: 25800 26250

Chart (H1)