By Dow Jones Technical Analysis: Index Deepens its Losses – 03 October 2022
Investors also heard Fed Vice Chair Lael Brainard reiterated that the central bank will keep interest rates high to combat inflation, even if it hurts the economy.
During the past week, the index recorded losses for the third consecutive week, by -2.92%. The index recorded monthly losses, the third in a row, declining during the month of September by -8.83%. For the quarter, the index decreased by 6.7%, which is the longest series of decline My quarter for the Dow Jones in seven years.
In line with a historical pattern, US stocks suffered during September, as a hawkish Federal Reserve helped push up Treasury yields and the dollar. This in turn undermined stock valuations.
New data on Friday showed that while US consumer spending beat expectations for August, the Fed’s preferred measure of inflation also rose more than expected despite the Fed’s efforts to tame it. The measure of inflation, the core PCE price index, advanced to an annualized rate of 4.9% in August from 4.7% in July, beating Wall Street expectations of a 4.8% reading.
Investors also heard Fed Vice Chair Lael Brainard reiterated that the central bank will keep interest rates high to combat inflation, even if it hurts the economy.
Technically, the index continued its decline amid the dominance of the short-term corrective bearish trend and its trades along major and minor slope lines. This was shown in the attached chart for a (daily) period, with the negative pressure continuing for its trades below the simple moving average for the previous 50 days.
The recent decline in the index came despite the start of positive signs in the RSIs, after they reached oversold areas, to discharge some of this oversold, which indicates the sellers’ control over the index’s movement.
Therefore, our expectations indicate a further decline for the index during its upcoming trading, to target the 28,402.50-support level, if the resistance remains at 29,653.30.
