Index News – Dow Jones Index Technical Analysis -06 January 2023
06 Jan 2023
Dow ends 300 points down as additional rate increases are predicted by solid jobs data
The Dow fell Thursday, paced by a slump in tech from rising Treasury yields as data continued to point to a tight labour market fuelling fears of aggressive Federal Reserve tightening just a day ahead of the December jobs report.
The Dow Jones Industrial Average slipped 1%, or 339 points
duo of reports comes showing that better-than-expected private job gains in November and fewer initial weekly jobless claims firmed up bets that the Fed will have more work to do restore supply and demand balance in a tight labour market that threatens to push wages higher.
Private payrolls grew by 235,000 in November, according to a report released Thursday by ADP and Moody’s Analytics, well above economists’ forecast of 150,000. Initial jobless claims fell to the lowest level since Sept. 24, with economists warning that claims were likely to trend higher despite the recent headlines of layoffs at major companies.
The report comes just a day ahead of the December jobs report that is expected show that the economy created about 200,000 jobs last month and the unemployment rate remained steady at 3.7%. Wage growth will likely dominate attention and is expected to slow to 0.4% for the month and 5% on an annualized basis from 0.6% and 5.1%, respectively.
Federal Reserve Bank of St. Louis President James Bullard said that while inflation is too high, the rates are getting closer to a “sufficiently restrictive zone.”
Treasury yields jumped sharply on the news, putting pressure on the rate-sensitive sectors of the market including tech.
DOW JONES TECHNICAL ANALYSIS
DAILY CHART:
Dow Jones is currently trading in up channel.
Dow Jones is currently trading below all SMA
RSI is in buying zone which suggests bullishness and Stochastic is suggesting no trend.
Dow Jones immediate resistance is at 33198 & its immediate support level is 33047
HOW TO TRADE DOW JONES IN THIS WEEK
Dow Jones is trading in up channel; but it is following trend reversal and moving downside by making lower low, further it can trade downside.