USA30: Between Inflation and Earnings Reports

USA30, Weekly

Due to continued market anxiety, the USA30 has been in a strong downward trend over the past few days. The majority of indices including the VIX Index, put and call options and market momentum are at a very high level of fear.

When the “fear and greed” VIX Index enters the extreme fear zone, the Dow Jones often drops. Investors are worried about economic conditions, the overly strong US Dollar and earnings reports. Thursday’s American inflation report and quarterly earnings will be the main drivers for the USA30.

Despite the fact that petrol prices fell in September, markets expect that the national inflation rate will remain high. At the same time, major financial institutions including Citigroup, JP Morgan and Wells Fargo will this week release their quarterly results.

This year, most of the Dow Jones components have been losing money. Companies such as Intel, Nike, Salesforce, Disney and 3M were among the worst performers. All of these stocks have lost more than 40% in value.

The USA30 has been trading in a tight range all week, below the 29,647 support which is close to the pre-pandemic high of 29,583. The USA30 has lost more than -14% from its August peak and lost more than -20% from its historical peak earlier in the year. Higher inflation reports could pressure the index to test the 50%FR retracement level around 27,560 or about 5% off the current price. Meanwhile, a near-term rebound will have to surpass the minor resistance of 30,454, otherwise the bears’ dominance will remain in place. The technical indicators all validate a downside move.

USA30, Daily

About the author

Ady Phangestu

Penulis buku teknikal analisa valuta asing, praktisi dan pengajar valuta asing yang sudah mengadakan seminar diberbagai wilayah Indonesia bersama dengan hfmarkets. Berkiprah didunia transaksi selama 12 tahun. Saat ini masih aktif sebagai penulis dan memberikan pembelajaran valuta asing dan pengenalan produk finansial. Pelatihan dasar-dasar valuta asing secara offline maupun online.