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Dow Jones Technical Analysis: The Index Takes Profits – 15 November 2022

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Investors focused on comments by Federal Reserve Vice Chair Lail Brainard, in a live interview with Bloomberg.

The Dow Jones Industrial Average declined during its recent trading at the intraday levels, to record losses in its last sessions, by -0.63%.The index lost the index by -211.16 points, settling at the end of trading at the level of 33,536.71, after rising in Friday’s trading by 0.10%.On the last trading day of the week, the index had a gain of 4.15%.


Stock markets are crashing again

Investors focused on comments by Federal Reserve Vice Chair Lail Brainard, in a live interview with Bloomberg. Brainard said that consumer price data released last week that was weaker than expected in October was initially “reassuring”, in terms of showing a slowdown. He noted that the Fed was focusing on core measures rather than food and energy prices, but the FOMC still had “more work to do” to bring down inflation.

Brainard echoed comments by other Fed officials that the pace of interest rate increases could slow in the near term. The focus should be on how high rates should eventually arrive to bring down inflation rather than how quickly the FOMC needs to lower inflation to 2% over time.

The massive rally in equities late last week was led by a weaker-than-expected inflation report that boosted investor hopes that the Federal Reserve might undo the monetary tightening that has punished markets this year.

More Fed officials are scheduled to speak later this week along with a slew of data, including retail and housing sales and earnings reports from major retailers.

Technically, the index’s decline comes as an attempt to reap the profits of its previous rises. To try to gain some positive momentum that may help it recover and rise again, amidst its impact on the breach of a bearish corrective slope in the short term. This is shown in the attached chart for a (daily) period, with the continuation of the positive support for its trading above its simple moving average for the previous 50 days. In addition to this, we notice the start of the influx of positive signals on the relative strength indicators, after the indicator succeeded in discharging its overbought, which was evident in it earlier.

Therefore, we expect the index to return to the upside during its upcoming trading, provided that the 32,504.00 support level remains intact, to target the important and nearby 34,281.36 resistance level, in preparation for attacking it.

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